In the first half of this year, there were more bankruptcies than in almost ten years. Private individuals are also affected more frequently. Jobs are not necessarily at risk as a result of the bankruptcies.
The number of corporate bankruptcies in Germany has risen by almost 30 percent year-on-year in the first six months of the year due to the weak economy. The credit agency Creditreform registered around 11,000 corporate bankruptcies, it announced today. This marks the highest level in almost ten years. The last time there were so many bankruptcies was in 2016.
According to Creditreform, significantly more medium-sized and large companies had to file for bankruptcy in the first half of 2024. The service sector was particularly affected, recording 6,500 bankruptcies, an increase of almost 35 percent. There was also a sharp increase in trade (plus 20.4 percent), construction (plus 27.5) and manufacturing (plus 21.5). The number of bankruptcies, especially among larger companies, is far above the level of recent years.
Insolvency can also Restructuring perspective bring
According to estimates by Creditreform, around 133,000 employees were affected by insolvency in the period from January to June 2024. In the same period last year, the number was slightly fewer – 125,000. Creditreform emphasizes that this does not necessarily mean that these people will lose their jobs: The focus of insolvency law is on restructuring and on maintaining companies and jobs, explained Patrik-Ludwig Hantzsch, head of Creditreform economic research.
This partly explains the increase in the number of cases in recent years. Companies are increasingly seeing insolvency as an opportunity in a crisis.
Consumers are also filing for bankruptcy more frequently
The number of insolvencies among consumers also rose in the first half of the year: Creditreform registered 35,400 cases, 6.7 percent more than in the same period last year. In addition to high inflation and the interest rate turnaround, which led to higher loan interest rates, the amendment to consumer insolvency law at the end of 2020 is likely to be responsible for this, the credit agency explained: The reform enables private individuals to obtain faster discharge of residual debt and thus makes the process more interesting for debtors.
Creditreform expects that insolvencies will continue to rise over the course of the year and will exceed pre-coronavirus levels for the first time in the year as a whole. The figures reflect the “pent-up problems of past crises,” according to the credit agency.
Many companies also have a debt problem and are currently barely able to meet their payment obligations on their own due to the poor economic situation.