October 2021

Personal insolvencies in Germany increased significantly in the first half of 2021 with 57,992 cases, 49.9 percent more than in the same period last year (H1 2020: 38,695). These are the key findings from the "Debt Barometer 1st Half 2021" of the information service provider CRIFBÜRGEL.

After ten years of falling case numbers, personal insolvencies are on the rise again in 2021. In the 1st half of 2021, there were already more personal insolvencies than in the entire year 2020 (56,324).

The trend of rising personal insolvencies continued in July, when the number rose by 93 percent to 8,835 insolvencies (July 2020: 4,572 personal insolvencies).

"Currently, we are forecasting up to 120,000 personal insolvencies in 2021. This would be more than double last year's figures," commented CRIFBÜRGEL Managing Director, Dr. Frank Schlein.

"The sharp rise in insolvencies in the first half of the year is largely due to the fact that many individuals held back their applications for personal insolvency last year. Those affected wanted to benefit from a legal reform under which, as of this year, consumers are freed from their residual debts after three years instead of six, as was previously the case," explained Dr. Schlein.

The reduction also applies retroactively to insolvency proceedings filed from October 1, 2020.

"Starting in May, we are now seeing an increase, including insolvencies directly caused by the coronavirus pandemic. This wave of insolvencies will then start to intensify from the 2nd half of 2021 and continue into 2022," said Dr. Schlein.

The coronavirus pandemic has shown how quickly unforeseeable external events can lead to financial stress for individuals. In Germany, approximately 6.8 million citizens are considered overindebted. For many of these people, a shock in terms of income can mean an increased risk of personal insolvency.

The economic consequences of the coronavirus pandemic are not only threatening the livelihoods of employees in the low-wage sector, but are also clearly felt in the middle-income sector, e.g., through short-time employment. In addition, higher unemployment is again leading to more personal insolvencies, as affected consumers have less money to spend while costs remain high. This leaves people with less money to meet their obligations such as loan repayments, rent, or financing. In the long run, less income leads first to overindebtedness and then to personal insolvency.

Many people who suffered drops in income during the coronavirus pandemic, for example due to unemployment or short-time employment, tried to carry on and cope with their financial situation on their own. However, the financial reserves of many of those affected have been depleted.

The proportion of formerly self-employed people who are filing for personal insolvency is also currently rising sharply. The self-employed and freelancers from a wide range of sectors lost almost all of their income from one day to the next during the pandemic. As a result, their income, which was often already low, fell further and their savings were quickly eaten up - loans, installment payments or rents can now no longer be paid.

Personal insolvencies by federal state: Bremen, Hamburg and Lower Saxony lead the insolvency rankings

Nationwide, there were 68 personal insolvencies per 100,000 inhabitants in the 1st half of 2021. The northern German states were more affected by personal insolvencies in the first six months than the south of Germany. Bremen, for example, leads the statistics with 135 personal insolvencies per 100,000 inhabitants. This is followed by Hamburg with 97 and Lower Saxony with 94 insolvencies per 100,000 inhabitants. In the 1st half of 2021, Bavaria (47 cases per 100,000 inhabitants), Baden-Württemberg (53), and Hesse (57) recorded the fewest personal insolvencies.

In absolute terms, the states of North Rhine-Westphalia (14,749), Lower Saxony (7,546), and Bavaria (6,227) lead the insolvency statistics.

Percentage changes: increases in all federal states

Personal insolvencies increased in all German states. This was seen most in Mecklenburg-Western Pomerania and Hamburg, with personal insolvencies up 74.2 percent. There were also significant increases in North Rhine-Westphalia (up 67.1 percent), Thuringia (62.3 percent), and Berlin (up 60 percent).

Personal insolvencies by age: significant increases among older German citizens

Personal insolvencies rose across all age groups in H1 2021. The biggest increase was in the 31-40 age group (up 55.3 percent). However, more and more older German citizens are also currently having to file for personal insolvency. In the 61 and older age group, the number of cases rose by 52.2 percent.