MAY 2021

Personal insolvencies in Germany jumped in the 1st quarter of 2021. In the first three months of the year, there were 31,821 personal insolvencies, 56.5 percent more than in the same period last year (Q1 2020: 20,328). These are the key findings from the "Debt Barometer Q1 2021" of the information service provider CRIFBÜRGEL.

After ten years of falling case numbers, personal insolvencies are on the rise again in 2021. "Currently we are forecasting up to 110,000 personal insolvencies this year, double that of last year," commented CRIFBÜRGEL Managing Director Dr. Frank Schlein. In 2020, there were a total of 56,324 personal insolvencies in Germany.

"The current significant increase in insolvencies is mainly due to the fact that many individuals held back applying last year. They wanted to benefit from a legal reform that will allow those affected by personal insolvencies to obtain a residual debt discharge after just three years, instead of six as was previously the case. Since this reform brings a significant advantage, many applicants have been waiting for the resolution of the Bundestag" explained Dr. Schlein.

The reduction of the residual debt discharge procedure to three years will also apply retroactively to all insolvency proceedings filed from October 1, 2020. This will also enable those debtors who have fallen into insolvency as a result of the COVID-19 pandemic to be supported in making a fresh financial start.

The wave of insolvencies directly caused by the coronavirus pandemic will begin in the 2nd half of 2021 and continue into 2022. The economic consequences of the coronavirus pandemic will not only threaten the livelihoods of employees in the low-wage sector, but will also be clearly felt in the middle-income sector, e.g., through short-time work. In addition, higher unemployment will again lead to more personal insolvencies, as affected consumers will have less money to spend while costs will remain high. This leaves people with less money to meet their obligations such as loan payments, rent or financing. In the long run, less income leads first to overborrowing and then to personal insolvency.

The northern German states were also more affected by personal insolvencies than those in the south of Germany in the 1st quarter of 2021. Bremen, for example, leads the statistics with 76 personal insolvencies per 100,000 inhabitants. It is followed by Hamburg with 57 insolvency cases per 100,000 inhabitants. The national average in the first three months of the year was 38 personal insolvencies per 100,000 inhabitants. Bavaria (26 cases per 100,000 inhabitants), Hesse (29) and Thuringia (30) recorded the fewest personal insolvencies in Q1 2021.

In terms of absolute personal insolvency figures, North Rhine-Westphalia (8,142), Lower Saxony (4,146) and Baden-Württemberg (3,479) top the list.

Personal insolvencies increased in all German states. The highest levels were seen in Mecklenburg-Western Pomerania (up 86.7 percent), North Rhine-Westphalia (up 81.1 percent), Hamburg (up 77.5 percent) and Thuringia (up 75.3 percent). Saxony-Anhalt reported only a slight increase (plus 0.3 percent).

59.1 percent (18,813) of personal insolvencies relate to men. The figures are also higher for men in a relative comparison of the sexes. For every 100,000 men, 46 personal insolvencies were reported, compared with 31 per 100,000 female inhabitants. However, the increase was greater among women (61.2 percent) than among men (53.4 percent).

Personal insolvencies increased across all age groups in Q1 2021. The largest increases occurred primarily in the two youngest age groups. Among 18-20 year olds, 83 citizens* filed for personal insolvency, an increase of 93 percent. In the 21-30 age group, the number of cases rose by 84.9 percent to 5,171 insolvencies (Q1 2020: 2,797).