The number of consumer bankruptcies is falling – and could soon skyrocket

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Pedestrian zone in Dortmund: No sign of a trend reversal in private debt

Photo: Bernd Thissen/ DPA

The corona pandemic drove numerous people into debt, but the credit agency Crif counted significantly fewer consumer insolvencies in Germany in the first quarter of 2022 than a year earlier.

With 22,166 cases, the number of private bankruptcies was a good 30 percent lower than in the same period last year.

However, this is likely to be due to a special effect: the numbers had risen sharply in the first three months of 2021 due to a change in the law.

This made it possible to be released from the remaining debt after three instead of six years.

According to experts, a number of those affected had therefore waited with their bankruptcy application, which drove the numbers up.

"Therefore, the rates of change are currently distorted," says Frank Schlein, Crif Managing Director in Germany.

If you compare the latest figures with the first quarter of 2020, there is an increase of nine percent.

And in the first three months of 2019, according to the credit agency, personal insolvencies were below the current level at 21,490 cases.

Most recently 27 private bankruptcies per 100,000 inhabitants nationwide

So there is no sign of a trend reversal.

According to Crif, the financial situation of many consumers in Germany remains tense, mainly due to rising rent and energy prices.

According to preliminary figures, inflation in May rose 7.9 percent to the highest level in almost 50 years.

High inflation weakens people's purchasing power.

“We are assuming that personal bankruptcy figures will remain high in 2022.

We are currently anticipating up to 95,000 consumer bankruptcies this year,” says Schlein.

According to figures from the Federal Statistical Office, the number of private bankruptcies in Germany almost doubled from 2020 to 2021 to 79,620.

According to the Crif evaluation, there were 27 personal bankruptcies per 100,000 inhabitants nationwide in the first three months of the current year.

The northern federal states are more affected than the south of Germany.

Bremen leads the statistics with 50 personal bankruptcies per 100,000 inhabitants, followed by Lower Saxony (39 cases per 100,000 inhabitants) and Hamburg (37).

Schleswig-Holstein (36), North Rhine-Westphalia and Mecklenburg-Western Pomerania (30 each) as well as Saxony and Saarland (28 each) are also above the national average.

Bavaria (16), Baden-Württemberg (20) and Thuringia (22) recorded the fewest personal bankruptcies.

In absolute numbers, the most populous federal state of North Rhine-Westphalia tops the insolvency statistics with 5,401 consumer bankruptcies.

Lower Saxony (3131 cases) and Baden-Württemberg (2202) follow.

The fewest cases were therefore in the first quarter in Saarland: 276.

apr/dpa