Economy: More bankruptcies in May

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    At the peak of the corona pandemic, the obligation to file for insolvency was temporarily suspended. That had had a positive impact. Since May, this effect has been absent again.

    The decline in company bankruptcies in Germany did not continue in May. According to preliminary information from the Federal Statistical Office, the number of regular insolvencies applied for in May rose by 8.4 percent compared to the previous month.

    In April, a decline of 20.8 percent compared to the previous month was recorded, as the Wiesbaden authority announced on Monday.

    Final figures are only available for the first quarter. In the period from January to March 2022, the German district courts reported 3,483 corporate insolvencies. That was 7.4 percent less than in the first quarter of 2021. The district courts put the expected claims of the creditors at almost 3.9 billion euros. In the same period of the previous year, they were around 17.1 billion euros.

    In order to avert a wave of bankruptcies as a result of the corona pandemic, the state had temporarily suspended the obligation to file for bankruptcy in the event of over-indebtedness or insolvency. Since May 1, 2021, the obligation to file for insolvency has again applied in full. There were exceptions until January 31, 2022 for companies that suffered damage from heavy rain or flooding last summer. Last year there were fewer company bankruptcies than ever before since the current insolvency code was introduced in 1999.

    Experts expect that the number of company bankruptcies will increase this year with the expiry of state corona aid. In addition, the economic consequences of the Ukraine war, skyrocketing energy prices and ongoing disruptions to supply chains and material shortages are weighing on the economy.