1. Overview: personal bankruptcies fall to their lowest level since 2005
The number of personal bankruptcies in Germany continues to fall. In 2015, 107,919 German citizens - individuals and formerly self-employed - registered a personal bankruptcy. Compared to last year, this figure represents a decline of 6.4 percent. These are the key findings from the study "Debt Barometer 2015" by the credit agency Bürgel. "Personal bankruptcies in 2015 are in decline for the fifth straight year. It is the lowest level in consumer insolvencies since 2005, as almost 100,000 personal bankruptcies were registered", said Bürgel Managing Director Dr. Norbert Sellin of the latest figures.
The highest value in the last ten years was in 2010 with 139,110 personal bankruptcies. "For 2016, we expect a further decline in numbers of personal bankruptcies. Currently, we expect 100,000 bankruptcies at the end of the year ", predicts Dr. Sellin.
2. Causes of declining personal bankruptcies: Low unemployment, high incomes and low inflation provide low levels of personal bankruptcies
The majority of individuals can be happy to have good and stable conditions in Germany. There are three factors in Germany that are responsible for the low level in personal bankruptcies. The main reason for the renewed decline in personal bankruptcies is still low unemployment. "Unemployment is trigger number one for a personal bankruptcy," says the Burgel Managing Director. "If unemployment rises, the number of personal bankruptcies will subsequently rise again. In 30 percent of cases across all age groups unemployment is the trigger for personal bankruptcy. A steady income forms the basis for ensuring that the expenses do not exceed revenues. " In addition, there are two concomitant effects that have a positive effect for individuals. On the one hand, the income situation of citizens - even by relatively high wage settlements - improved. On the other hand, inflation was 0.3 percent in 2015 and remains at a low level. Consequently, Germans will also have felt a real effect of this in their pockets.
3. Counter-running trend: For the fourth consecutive year the number of cases has risen in older German citizens
The age group of Germans "61 years and older" are increasingly excluded from the trend of declining numbers in personal bankruptcies. In 2015, personal bankruptcies have risen for the fourth time in a row among older people. After the strong increases in recent years (2012: plus 1.2 percent, 2013: plus 8.4 percent, 2014: plus 13.9 percent) the number of cases in the age group "61 years and older" increased by 0.6 percent to (10,751 cases).
This number, according to the latest Bürgel statistics, includes people of retirement age who must register for bankruptcy, specifically because their income or pensions are not sufficient in many cases. Consequently, this age group is increasingly exposed to financial emergencies. Many of these citizens are dependent on a basic security. According to the Federal Statistics Office almost one million pensioners are currently receiving the basic state pension, half because of a permanent disability. The number of recipients of basic old-age security practically doubled between 2003-2014, with an increase of 99 percent. To address financial difficulties and debts, seniors have increasingly adopted mini-jobs in recent years. If these measures do not help and the financial distress is too large, the situation often ends up in a personal bankruptcy.
The causes of poverty in old age and personal bankruptcies in the group "61 years and older" are founded in declining pension levels and increasing taxation. The growing low-wage sector, but also illness and the associated costs are causing more and more people to be at risk of poverty in old age. Due to the demographic development of a growing population, in the future it will continue to face financial problems in old age. "We assume that the number of personal bankruptcies in older people will remain at a high level also in 2016," said Dr. Sellin.
4. Regional analysis of private bankruptcies: north-south divide remains
Most personal bankruptcies were filed in 2015 in North Rhine-Westphalia. In the most populous state, 25 672 citizens were insolvent. This is more than a fifth (23.8 percent) of all personal bankruptcies in Germany are accounted to the population of North Rhine-Westphalia. In absolute terms, the states of Lower Saxony (14,119), Bavaria (12,031) and Baden-Württemberg follow (10,244).
The state of Bremen has a special role in the evaluation of personal bankruptcies. Ranked in absolute figures, Bremen is best with 1,406 personal bankruptcies. However, this order will change if relative numbers - personal bankruptcies per 100,000 inhabitants - are included in the analysis. With 212 private insolvencies per 100,000 inhabitants, Bremen is therefore at the top of the statistics. The second most frequent personal bankruptcies were reported in 2015 in the Saarland. Here, there were 184 personal bankruptcies per 100,000 inhabitants. This is followed by Hamburg (181) Lower Saxony (180) and Schleswig-Holstein (174), invariably northern German federal states. This means that the so-called North-South divide in personal bankruptcies continued into 2015, with the exception of Saarland. Fewer personal bankruptcies occurred in the southern provinces. In Bavaria only 85 out of 100,000 citizens registered a bankruptcy. Also low values in Baden-Württemberg (96) and Thuringia (102). The national average was in 2015 at 133 personal bankruptcies per 100,000 inhabitants. For comparison: Two years ago the average was still at 151 per 100,000 personal bankruptcies; 2014, still at 143 per 100,000 citizens.
5. Percentage changes: Only the Saarland reports more personal bankruptcies
The trend of declining numbers of cases in private insolvencies in 2015 was shown in 15 federal states. The development was opposite only in Saarland. There was a slight increase of 0.8 percent (14 personal bankruptcies more than 2014). The largest decrease was a decline of 12.8 percent reported in Thuringia. Already in 2014, the numbers in this state decreased by two digits (minus 13.7 percent). A strong decrease was also seen in Bremen. Here, the number of private bankruptcies fell to 12.6 percent. More clearly than the national average (-6.4 percent), personal bankruptcies also decreased in North Rhine-Westphalia (minus 9.6 percent), Rheinland-Pfalz (minus 8.5 percent), Schleswig-Holstein (minus 7.6 percent), Bavaria (minus 7.5 percent) and Mecklenburg-Vorpommern (minus 7.3 percent).
6. Personal bankruptcies by gender: more men than women report a personal bankruptcy - larger decline for men
As in recent years, the proportion of men in personal bankruptcy statistics is higher than for women. This relates to both the absolute and the relative numbers. While the relative value of the national average accounts for 133 cases per 100,000 population, German males were responsible in 2015 for 159 private insolvencies per 100,000 population (absolute: 63 273 cases). This contrasts with 44 646 women who had to file for personal bankruptcy. In other words, last year - well below the national average - 108 women for 100,000 citizens were insolvent. However, the decline, with a decrease of 4.8 percent, was lower in women compared to men (minus 7.5 percent). The reason that more men register for personal bankruptcy compared to women is that the man in many families is still considered the main breadwinner and person responsible for household budget despite the changes in lifestyles and roles. This is the case for debt within the family and declaration of personal bankruptcy.
7. Personal bankruptcies by age group: Declining numbers in all age groups - with the exception of older Germans
The problem of rising numbers in personal bankruptcies in the age group "61 years and older" was shown in section. 3 In all other age groups analysed, 2015 showed a trend of declining personal bankruptcies. Particularly positive is the development in young German citizens 18 to 20 years old. Here, personal bankruptcies decreased by 18.5 percent. But even for 41-50-year-olds, the number of personal bankruptcies fell two digits (minus 11.2 percent). In all other age segments, the number of personal bankruptcies fell below average compared to the nationwide decline. In the group of 21-30 year olds, there were a reported 3.9 per cent fewer Germans with personal bankruptcy. For 31-40-year-olds, there were 5.6 percent fewer and for those residents who are 51-60 years, the number decreased by 5.3 percent. 8. Causes of personal bankruptcy: Six main reasons for a private insolvency
8. Causes of personal bankruptcy: Six main reasons for a personal bankruptcy
People who need to sign a personal bankruptcy have one thing in common. For those concerned, for a significant period of time expenditure has exceeded revenue. This results in severe arrears, which open up into a personal bankruptcy. However, it is a misconception that people who file for a personal bankruptcy must necessarily be in debt. Across all age groups across the average debt level of those affected is around 33,500 euros. For under-25s, however, the value is much lower. Here the average debt total is just under 10,000 euros. With increasing age, the debt increases to up to an average of 43,000 euros with the German citizens in the age group 61 years and over. The main causes of personal bankruptcy are closely linked to the income situation of the persons concerned. There are six main causes ("Big Six"), that are mentioned time and again, when it comes to the causes or reasons of personal bankruptcies. Among the reasons are unemployment and reduced work, income poverty, failed independence, a consumption behaviour inappropriate to income, changes in family circumstances such as divorce, or separation and disease. The majority of individuals in bankruptcy owe especially at banks, mail order companies, insurance companies, government agencies, landlords, utilities and telephone companies.