Personal bankruptcy in Germany: fewer and fewer consumers achieve debt discharge after three years

Personal insolvency proceedings in Germany were reformed on July 1, 2014. Since the reform came into effect, 7.4 percent of those affected have been able to reduce residual debt discharge to three years.

One of the aims of the reform was to enable insolvent consumers to discharge their debts more quickly. However, figures after one and a half years show that the reform is passing by the majority of affected consumers.

This is confirmed by current figures from the information service provider CRIF BÜRGEL. From July 1, 2014 to December 31, 2015, 150,496 private individuals in Germany had to file for insolvency. 7.4 percent (11,170) of them succeeded in reducing residual debt discharge to three years. The trend also shows that fewer and fewer consumers are successful in shortening the discharge of residual debt. Between the beginning of July and the end of December 2015, 48,491 people filed for personal insolvency in Germany. Of these, 5.8 percent (2,795) achieved residual debt discharge in the same period of 2018 after three years instead of the usual six years.

In the first two half years after the reform came into effect, the figure was significantly higher at 8.3 percent (residual debt exemptions 1.7.2017 - 31.12.2017 from the insolvency proceedings of 1.7.2014 - 31.12.2014) and 8.1 percent (residual debt exemptions 1.1.2018 - 30.06.2018 from the insolvency proceedings of 1.1.2015 - 30.06.2015), respectively.

"When the reform came into force, many people worked towards the first discharge of residual debt after three years. However, current figures show that fewer and fewer private individuals are benefiting from the reform. Most of those affected are only debt-free after six years", CRIF BÜRGEL Managing Director, Christian Bock, commented on the current study. A total of almost 620,000 people in Germany are currently waiting for residual debt discharge. With a standard six-year period of good conduct, 2019 people from 2013 will be able to obtain residual debt discharge.