Insolvencies in Germany rise sharply

13.2% more regular insolvencies filed in March 2023 than in previous month. Only moderate increase in number of consumer insolvencies.

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

Sharp rise in corporate insolvencies

In January 2023, the number of corporate insolvencies in Germany rose by 20.2% year-on-year. December 2022 had already seen a year-on-year increase of 19.7%. Creditors' claims from insolvencies reported in January 2023 are estimated at almost €2.3 billion, compared with over €1.4 billion in the prior-year month. The construction sector reported the most corporate insolvencies, with 246 cases in the reporting period.

End of the catch-up effect for consumer insolvencies

The number of consumer insolvencies filed rose by 1.9% in January 2023 compared with the same month a year earlier. The increase was due to a change in the law, which provides for a gradual reduction in 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.

Standard insolvency proceedings predominate

Most insolvency proceedings in Germany are regular insolvency proceedings, which primarily involve proceedings by companies. Around 55 percent of all regular insolvency proceedings involve companies. In addition, persons who are economically active, such as personally liable partners of a general partnership, majority shareholders of a corporation or formerly self-employed persons who are classified as over-indebted, can also apply for standard insolvency proceedings. Overall, regular 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 insolvency petition.