In the first half of 2013 the number of private insolvencies decreased to 63,006 insolvent German citizens. In comparison with the same period of the previous year this represents a drop of 3.9 per cent. This figure is included in the current “Debt Barometer 1st Half-year 2013” survey published by the financial information agency Bürgel. According to the survey the private insolvency situation in Germany has improved slightly following the weak first quarter of this year. “The robust domestic economy is the primary reason for the improvement as it is having a positive effect on the employment rate and increases in pay,” says Bürgel’s Executive Manager Dr. Norbert Sellin commenting on the current figures. Bürgel expects the number of private insolvencies in Germany for the whole year to total between 126,000 to 128,000 cases. “While the situation after the first quarter of 2013 indicated increasing figures for the whole year present circumstances have improved somewhat. We expect around 2,000 to 4,000 fewer insolvencies than in 2012,” summarizes Dr. Sellin.
Despite this positive outlook many people are continuing to struggle to maintain their solvency. Bürgel currently assumes that the number of private insolvencies in the coming years will level off at between 125,000 and 135,000 cases annually – despite the fact that the statistics are highly dependent on the employment market. The reason for this? “Unemployment is, and continues to be, the Number 1 cause of private insolvencies,” emphasizes Dr. Sellin. If unemployment figures go up then the number of private insolvencies also soars.
The individuals concerned do not always have to be highly in debt to slide into bankruptcy. Based on the German national average insolvent private individuals have debts amounting to approx. € 28,000. In the case of younger citizens aged under 25 years the average debt is less than € 10,000.
In particular private individuals are in debt to credit institutions, mail-order companies, insurance companies, public institutions, landlords, public utilities and telephone companies.
The main reasons for private insolvency are primarily unemployment; permanently low income; failed self-employment and real estate financing; separation and divorce as well as illness. In addition to this, a lack of experience in handling finances and dealing with banks as well as inappropriate consumer behaviour contribute heavily to the fact that these individuals become insolvent.
In an absolute comparison during the survey period of the first half-year of 2013 the highest number of private insolvencies – 15,108 cases – was recorded in the Germany’s most densely populated state, North Rhine-Westphalia. The relative figures – private insolvencies per 100,000 inhabitants per state – draw attention to Bremen in particular. With 129 cases per 100,000 inhabitants the city-state recorded the highest number of private bankruptcies during the survey period. It was followed by Hamburg (108 cases per 100,000 inhabitants), Schleswig-Holstein (103) and Lower Saxony (101). In the south, in contrast, figures were moderate and lowest in Bavaria with 58 cases per 100,000 inhabitants. Baden-Württemberg (59) did almost as well, followed by Thuringia (66) and Hesse (68). The national average was 78 private insolvencies per 100,000 inhabitants.
In the first half of 2013 figures increased in only two federal states. The highest increase was recorded by Hamburg with plus 5.1 per cent to 1,870 private bankruptcies. The increase was somewhat less marked in Saxony-Anhalt, where there were 2.1 per cent more private insolvencies in the first half-year than in the comparable period of the previous year. Thuringia, in contrast, reported markedly fewer private bankruptcies (minus 9.8 per cent), closely followed by Saxony (minus 9.4 per cent) and Rhineland-Palatinate (minus 8.4 per cent).
Of the individuals filing for personal bankruptcy in the first half of 2013 36,633 were men and 26,373 women. This male dominance is apparent throughout almost all age groups. The imbalance is especially marked in the 51- to 60-year old debtor age group, with men accounting for 59.5 per cent. The only exception is the 18- to 20-year olds, where the majority of individuals becoming bankrupt during the first half-year of 2013 were women, at 54.6 per cent.