Saxony: Consumer bankruptcies in Saxony have risen sharply

Dresden (dpa/sn) - The number of consumer bankruptcies in Saxony rose sharply in the second year of the corona pandemic.

Saxony: Consumer bankruptcies in Saxony have risen sharply

Dresden (dpa/sn) - The number of consumer bankruptcies in Saxony rose sharply in the second year of the corona pandemic. As Social Affairs Minister Petra Köpping (SPD) said on Thursday in the state parliament, they increased by almost 84 percent in 2021 compared to the previous year. According to the Federal Statistical Office, there were a total of 3,698 consumer bankruptcies in Bavaria. The expected claims amounted to almost 150 million euros. Nationwide, the number of consumer bankruptcies had increased by 90.7 percent in the previous year, almost doubling.

According to Köpping, the protective measures of the pandemic are not the main cause. Rather, the regulations on short-time work had a stabilizing effect. "Nevertheless, the situation will probably not get any better this year," said the minister, referring to the currently high inflation rate and rising costs for housing, transport, water and energy. All of these factors would have a particularly strong impact on those looking to reduce private debt. Consumer insolvency advice is therefore in great demand.

According to Köpping, the debt has become more complex. People don't just have one problem, they often have several. Some are so dismayed that they no longer open their mail for fear that bills might be in it. Reasons for financial difficulties are often separations and divorces. Illness, accidents, unemployment, addiction and consumption also play a role. Lots of small loans to buy certain goods would add up. Failed self-employment is also an issue.

According to the Federal Statistical Office, the sharp increase in consumer bankruptcies is also linked to a law gradually shortening the procedure for discharge of residual debt from six to three years. The regulation applies to procedures that have been applied for since October 1, 2020 and enables those affected to start a new business faster after insolvency proceedings. Experts assume that many over-indebted private individuals initially withheld their bankruptcy application in order to benefit from the new regulation.