Insolvencies in Germany rise sharply

13.2 % more regular insolvencies applied for in March 2023 than in the previous month The number of consumer insolvencies is only rising moderately

According to preliminary figures from the Federal Statistical Office (Destatis), the number of regular insolvencies in Germany rose by 13.2% in March 2023 compared to the previous month. There was already a 10.8% increase in February 2023 compared to January. However, the results are influenced by the time lag between the filing of the application and the decision of the insolvency court.

Sharp rise in corporate insolvencies

In January 2023, the number of corporate insolvencies in Germany rose by 20.2% compared to the same month in the previous year. In December 2022, there was already an increase of 19.7% compared to the same month in the previous year. Creditors' claims from the insolvencies reported in January 2023 are estimated at almost 2.3 billion euros, compared to over 1.4 billion euros in the same month last year. The construction industry reported the most corporate insolvencies with 246 cases in the reporting period.

End of the catch-up effect in consumer insolvencies

The number of consumer insolvencies applied for rose by 1.9% in January 2023 compared to the same month of the previous year. The increase is due to a change in the law, which provides for a gradual shortening of the residual debt discharge procedure from six to three years. The resulting catch-up effect led to a sharp rise in consumer insolvencies at the beginning of 2021, which now appears to have subsided.

Regular insolvency proceedings predominate

Most insolvency proceedings in Germany are standard insolvency proceedings, which primarily affect companies. Around 55 percent of all standard insolvency proceedings concern companies. In addition, persons who are economically active, such as personally liable partners in a general partnership, majority shareholders in a corporation or former self-employed persons who are classified as over-indebted, can also apply for standard insolvency proceedings. Overall, standard insolvency proceedings account for around 30 percent of all insolvency proceedings. Other reasons for company closures are not included in the insolvency statistics if they are not related to an obligation to file for insolvency.