1. Introduction: seventh decline in a row in private insolvencies
Private insolvencies declined for the seventh consecutive year in 2017. Last year 94,079 private individuals had to file for insolvency - the lowest number since 2004. Private bankruptcies thus fell by 6.8 percent compared to 2016 (2016: 100,984). These are the key findings of the CRIFBÜRGEL study "Debt Barometer 2017". Compared to the record insolvency year 2010, when 139,110 private individuals had to file for insolvency, the number of cases fell by 34.4 percent in 2017.
The main reason for the renewed decline in consumer insolvencies is the continued positive situation of private individuals. They benefit from improved labor market conditions with falling unemployment and rising wages.
"Unemployment and the associated deterioration in income is the main driver of private insolvency. The formula for fewer private bankruptcies is therefore simple. An increase in the number of employees leads to a decline in private insolvencies", CRIFBÜRGEL Managing Director Ingrid Riehl explains the decline in insolvencies. An increase in the financial burden on consumers, for example due to a deterioration in the situation on the labor market or an interest rate turnaround, would lead to an increase in private insolvencies," said Riehl. Another reason for fewer private insolvencies is of a methodological nature on the part of those affected. For example, many over-indebted citizens who use a garnishment protection account see no need to file for private insolvency. This is the case if the monthly income is so low that it is below the attachable amount.
For 2018 as a whole, CRIFBÜRGEL anticipates a further decline in private bankruptcies to 90,000 cases (minus 4.3 percent) due to the continuing good conditions for private individuals.
2. Comparison of the German states: Bremen and Saarland are insolvency strongholds
Bremen was once again a stronghold of insolvency in 2017. For every 100,000 citizens, 199 were insolvent. In a comparison of the federal states, Saarland ranks second with 161 insolvencies. This is followed by the well-known North-South divide in private insolvencies. Lower Saxony and Hamburg (155 insolvencies per 100,000 inhabitants) and Schleswig-Holstein (149) are above the national average (114). Saxony-Anhalt (148), Mecklenburg-Western Pomerania (134), Brandenburg (131), North Rhine-Westphalia (127) and Berlin (124) also rank above this. Bavaria reported the lowest number of private insolvencies in 2017 (78 cases per 100,000 inhabitants). The figures for Baden-Württemberg (80) and Hesse (93) were also low in relation to the number of inhabitants.
In the statistics of absolute private insolvency figures, North Rhine-Westphalia (22,802), Lower Saxony (12,394) and Bavaria (10,099) are also the most populous federal states.
3. Percentage changes: Private insolvencies rise in Thuringia and Berlin
Only in Thuringia (plus 2.9 percent) and Berlin (plus 2.8 percent) did private insolvencies rise in 2017. Private bankruptcies declined in all other federal states. In Hesse (minus 17.7 percent), Saxony (minus 13.9 percent), Bavaria (minus 10.2 percent) and Baden-Württemberg (minus 10 percent), private insolvencies fell by double digits. Consumer insolvencies also fell significantly in Lower Saxony (minus 8.5 percent), Saarland (minus 7.4 percent) and Saxony-Anhalt (minus 6.7 percent).
4. Private insolvencies by gender: more men than women continue to be affected by private insolvency
The trend in recent years that men are more likely than women to file for private insolvency in Germany continued in 2017. 59 percent (55,518) of all private bankruptcies in 2017 affect men. Men are also the leaders in a relative comparison of the sexes. In 2017, 100,000 men accounted for 136 private insolvencies. In contrast, there are 92 private bankruptcies per 100,000 female inhabitants.
The main reason why more men file for private insolvency than women is that in many families men are still considered to be the main earners and householders. In the event of over-indebtedness within the family, the latter pays for the family and files for private insolvency.
5. Private insolvencies by age: bankruptcies are falling in all age groups
The positive trend of falling private insolvencies is also reflected in the analysis of age groups. The sharpest falls were recorded in the youngest age group of 41- to 50-year-olds (down 11.5 per cent) and 18-20-year-olds (down 10.1 per cent). Citizens between the ages of 31 and 40 account for the largest share of insolvency activity. In this age group, 25,771 private individuals had to file for insolvency (27.4 percent of the total). A trend of recent years seems to have stopped for the time being. After five consecutive increases, insolvencies in the 61-year-old and older age groups also declined for the first time (minus 8.2 percent).
6. Causes of private insolvency: Six main reasons for consumer insolvency
In most cases, one of the six main reasons for excessive debt is cited as the cause of private insolvency. The reasons include unemployment and reduced work, income poverty, failed self-employment, uneconomic household management, changes in the family situation such as divorce or separation and illness. The majority of private individuals in insolvency have debts with banks, mail order companies, insurance companies, public authorities, landlords, energy suppliers and telephone companies. The average debt of those affected is around 32,000 euros in total.