DESTATIS: Requests for normal business insolvency in June 2022 down 7.6% on previous month

Based on provisional data of the Federal Statistical Office (Destatis), the number of requests for normal business insolvency in Germany in June 2022 fell by 7.6% on May 2022. The increase observed in May (+8.4% on April 2022) did not continue. During the Covid-19 pandemic, insolvency figures decreased, at times considerably, as a result of special legal regulations and financial support. There have not been any special pandemic-related regulations in force since May 2021.

6.4% fewer corporate insolvencies in April 2022 compared with April 2021.

According to final results, German district courts reported 1,248 corporate insolvencies filed in April 2022. This was 6.4% fewer than in April 2021.

The district courts put the probable claims of creditors from the corporate insolvencies reported in April 2022 at just under €1.4 billion. In April 2021, they had stood at around 2.5 billion euros.

The highest number of corporate insolvencies in April 2022 was in the construction sector, with 221 cases (April 2021: 215; +2.8%). This was followed by the trade sector (including maintenance and repair of motor vehicles) with 187 proceedings (April 2021: 195; -4.1%).

Special arrangements in 2020 and 2021 due to Corona and floods

When comparing the insolvency figures for companies over time, it should be noted that insolvency activity in 2020 and 2021 was dominated by special regulations. From the beginning of March 2020 to the end of 2020, the insolvency filing requirement for over-indebted companies was suspended as a result of the Corona pandemic. This regulation continued to apply until the end of April 2021 for companies that were still awaiting payment of the government assistance provided for since November 1, 2020. For these companies, the obligation to file for insolvency proceedings was not fully reinstated until May 1, 2021.

If the occurrence of insolvency or overindebtedness was based on the effects of heavy rainfall or flooding in July 2021, the obligation to file for insolvency was suspended until January 31, 2022.

19.7% fewer consumer insolvencies in April 2022 than in April 2021.

The number of consumer insolvencies fell by 19.7% in April 2022 compared with the same month a year earlier. The trend in consumer insolvencies since mid-2020 should be viewed in the context of a law to gradually shorten residual debt discharge proceedings from six to three years. The new regulation applies to consumer insolvency proceedings filed since October 1, 2020 and enabled those affected to make a new economic start more quickly following insolvency proceedings. It can therefore be assumed that many over-indebted private individuals initially held back their insolvency application in order to benefit from the new regulation. This catch-up effect caused a sharp rise in consumer insolvencies from the beginning of 2021 and now appears to have come to an end.

Source: Destatis