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Credit reform: 24,000 or more bankruptcies in 2021 | Free Press

There will be significantly fewer insolvency proceedings in the Corona year than in the previous year. The reason for this is the lax bankruptcy law. By 2021, however, Creditreform expects an increase.

Düsseldorf / Osnabrück (dpa) – The credit reporting agency Creditreform expects a significant increase in insolvency proceedings in the German economy over the next year.

Managing Director Volker Ulbricht speaks at the “Neue Osnabrücker Zeitung” of up to 24,000 or more cases: “I expect the wave of insolvencies to peak in the first quarter of 2021 and only then will it be clear how the second lockdown will have an additional effect Ulbricht said. Faced with the impression of the impending “mild” lockdown in November, the outlook will once again darken for many industries, despite the additional aid announced.

For this year, the credit agency expects between 17,000 and 18,000 insolvency proceedings, less than last year. “The fact that the number of bankruptcies this year is lower than in 2019 can only be explained by the fact that many free riders have been helped or have benefited from the suspension of the obligation to declare bankruptcy,” said Ulbricht. In the first half of 2020, the number of corporate insolvencies fell 8.2 percent to 8,900 cases, Corona notwithstanding, according to previous information from Creditreform. Ulbricht emphasized at the time that the bankruptcy process has been disconnected from the real economic situation of the companies.

If a business runs out of money permanently, it usually has to file for bankruptcy in the local court. In the event of imminent insolvency or over-indebtedness, the application is mandatory after a specified period.

More recently, bankruptcy law was relaxed due to the tense situation at many companies. Companies that have run into debt during the Corona crisis do not have to file for bankruptcy before the end of the year. But you still have to be solvent.