Creditors’ claims rise: There is no wave of insolvencies in the first half of the year

Creditor claims increase
There is no wave of insolvencies in the first half of the year

In the first Corona year, the state gives companies a hand and buffers losses. Experts therefore expect massive catch-up effects in the event of bankruptcies in 2021. But so far they haven’t been. In contrast, the number of personal bankruptcies is increasing by leaps and bounds. But that is less due to the pandemic.

According to the Federal Statistical Office, there was no wave of bankruptcies among companies as a result of the Corona crisis. Instead, the number of reported corporate insolvencies continued to fall, said the Federal Office. According to this, 7,408 corporate insolvencies were reported by the German local courts – 17.7 percent less than in the first half of 2020 and 22.9 percent less than in the first half of 2019, which was unaffected by the Corona crisis.

However, at 31.8 billion euros, the expected claims of the creditors are almost twice as high as in the first half of 2020, as the Federal Office further explained. At that time, the claims from corporate insolvencies applied for amounted to 16.7 billion euros. The increase was due to “the fact that in the first half of 2021 more economically important companies filed for bankruptcy than in the same period of the previous year,” said the Federal Office.

The insolvency events in the first half of the year continued to be characterized by special regulations: for example, the obligation to file for insolvency for over-indebted companies was suspended last year; for companies for which the state corona aid was still pending disbursement, this continued to apply until the end of April 2021. It can be assumed that “the state economic aid for companies and the obligation to file for insolvency, which will only apply again from May, contributed to the low insolvency figures in the first half of 2021,” said the Federal Office.

Trade and the construction industry in particular are hit hard

Most corporate insolvencies in the first half of the year were in the construction industry with 1219 cases – 16.6 percent fewer than in the same period of the previous year. In trade there were 1120 procedures (minus 24.6 percent) and in the area of ​​other economic services, which also include travel agencies and tour operators, 805 (minus 14.5 percent).

The number of standard insolvency proceedings applied for provides information on the future development of corporate insolvencies. In August 2021, according to preliminary data, this number fell by 19 percent compared to July 2021. However, it rose by 14 percent compared to August 2020, when the application requirement was completely suspended and there was a sharp decrease compared to August 2019 (minus 35.4 percent) came.

The number of consumer bankruptcies increased significantly in the first half of the year: 42,304 consumers filed for bankruptcy, an increase of more than half (51.1 percent) compared to the same period in the previous year. The strong increase is to be seen in connection with a law to gradually shorten residual debt discharge procedures from six to three years, said the Federal Office.

The new regulation applies to consumer insolvency proceedings applied for from October 1, 2020 and enables those affected to make a faster economic fresh start following insolvency proceedings. It can therefore be assumed “that many over-indebted private individuals initially withheld their application for insolvency in order to benefit from the new regulation,” explained the Federal Office.