Inflation is threatening the livelihoods of a growing number of people. That urged the debt counseling on Thursday. In the first half of the year, the number of private bankruptcies increased by 34 percent compared to 2021, it said.
The number of first contacts rose by 10.5 percent in the first half of the year compared to the previous year. One should pay out subsidies in a more targeted manner, demanded the debt counseling service. In any case, the consequences of inflation would only be noticeably delayed.
High living costs would “overwhelm many sooner or later,” it said. The number of private bankruptcies is increasing in all federal states, and the wave of bankruptcies has probably not yet peaked, fears Clemens Mitterlehner, Managing Director of ASB Schuldnerberatungen GmbH, the umbrella organization for state-approved debt counseling in Austria.
“Observing situation with great concern”
The problem is that “these rising bankruptcy figures hardly include the effects of inflation. The effects of the price increase will only lead to bankruptcies with a delay.” Therefore, the situation is being observed “with great concern,” says Mitterlehner.
The revised insolvency law allows debt relief within three years. A private bankruptcy is no longer affordable for many, because “it is necessary that all expenses can be covered with the income and no new debts are incurred,” said Mitterlehner.
The option of a shortened bankruptcy procedure for private individuals – unlike for companies – is limited to 2026. In line with the principle of equality, one should no longer differentiate here, demanded the debt counseling service.
Targeted funding required
A more targeted distribution of subsidies for people with low incomes is therefore necessary. This would boost consumption in low-income households and strengthen the economy. In the middle of the week, the trade union-affiliated Momentum Institute calculated that inflation would cost the poorest tenth of Austrian households 1.25 monthly incomes today.
The business-oriented Agenda Austria countered this and described the cost-of-living packages as sufficient. The scope of the current wave of bankruptcies as a result of inflation will only “become fully visible in the long term”, ASB Managing Director Mitterlehner pointed out.