Economy & Politics

5 facts about bankruptcies in the corona crisis

Demo of the event industry: The industry fears a wave of bankruptciesimago images / Michael Schick

# 1 Fewer bankruptcies

The federal government has suspended the obligation to file for insolvency since March 1, 2020. As a result, there were significantly fewer corporate insolvencies in the first half of the year despite the economic crisis. The Federal Statistical Office reported a decrease of 6.2 percent compared to the same period in 2019. The local courts were therefore reported to 9,006 corporate insolvencies.

# 2 bankruptcies in retail

These industries were particularly hard hit by bankruptcies in the first half of the year:

  • Retail (including car workshops): 1485 insolvency applications (first half of 2019: 1653)
  • Construction: 1462 insolvency applications (2019: 1586)
  • Hospitality: 1004 insolvency filings (2019: 1143)
  • Professional, scientific, technical services: 974 insolvency applications (2019: 1032)

# 3 Larger companies affected

The number of bankruptcies has decreased because of the grace period. The bankruptcies became much more expensive. The expected claims of the creditors were from January to June 2019 at 10.2 billion euros. In 2020 the total increased to 16.7 billion euros. “This increase in receivables with a simultaneous decrease in the number of corporate insolvencies is due to the fact that more economically important companies filed for bankruptcy in the first half of 2020,” said the Federal Statistical Office.

# 4 Less personal bankruptcies

The number of private debtors also fell during the Corona crisis. It decreased by 14.5 percent to 27,992.

# 5 trend continues

The deceptive decline in corporate bankruptcies continued in August and even intensified. “Compared to August 2019, the number of regular bankruptcy proceedings opened fell by 38.9 percent,” reported the statisticians. From October this could gradually change. The federal government has extended the suspension of the obligation to file for insolvency from September 30th to the end of the year. However, this only applies to companies that are over-indebted due to the Corona crisis but are not insolvent.

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