Personal bankruptcies: does the wave come with a delay?
business
The number of personal bankruptcies filed with the court is still well below the level that existed before the CoV crisis began. In addition, the number of debt counseling services increased significantly over the course of the year. Experts calculate with a delayed increase in personal bankruptcies.
The crisis with its lockdowns is hitting people extremely hard – including many, according to debt advisors.
Better conditions for debtors since 2021
The number of personal bankruptcies in Salzburg in 2021 fell by a quarter compared to the previous year. In Tyrol, on the other hand, it was almost 30 percent more today than in 2020. All other federal states are somewhere in between.
The creditors’ advocates are surprised that the decline in Salzburg is so great. This actually expected that a change in the law that came into force in July 2021 will result in more personal bankruptcies. For private individuals, the repayment times have been shortened and the conditions improved.
“Wave reaches dishes with a delay”
Peter Niederreiter from the Salzburg debt counseling department is also amazed at the development. Actually, there has been significantly more activity at the advice centers this year since the second quarter. The level from before the CoV crisis has now been reached again. It is therefore likely that in many cases the preparation for personal bankruptcy proceedings has not yet been completed. Each case then takes an average of six months, says Niederreiter. You will feel that in court in the next few months.
Damage sums are low
One trend, on the other hand, was uniform throughout Austria this year. The sums of damage in personal bankruptcies are getting smaller. In the previous year, an average of 168,000 euros in liabilities were registered in Salzburg for each bankruptcy. This year it was only 116,000 euros – almost a third less.
Not much has changed for clients in debt counseling, says Niederreiter, the managing director. Between 25 and 30 percent are failed sole proprietorships. Another big part are private bankruptcies after divorces or separations. There are also people who die after losing their jobs or seeing no other way out when it comes to money.