Fewer bankruptcies despite partial return to the obligation to file

State aid covers the plight of companies in the Corona crisis. The low number of bankruptcies is probably related to the suspended filing obligation for over-indebted companies.

It's over, it's over: “We're closing” is written on a poster in a shop window in Berlin

Dhe number of bankruptcies in Germany fell sharply in October, despite the fact that insolvency filing for insolvent companies was once again in effect. The local courts reported 1,084 corporate insolvencies, 31.9 percent less than a year earlier, as the Federal Statistical Office announced on Monday.

“The economic hardship of many companies due to the Corona crisis has not yet been reflected in an increase in the number of reported corporate insolvencies,” said the statistical office. One reason for this is that the obligation to file for insolvency for over-indebted companies was suspended until December 31st. “The obligation to file for insolvency for insolvent companies, which will apply again as of October 2020, will only have an impact on the numbers later due to the processing time of the courts,” it said.

Increasing number of bankruptcies noticeable

According to the Halle Institute for Economic Research (IWH), it usually takes two months between the company’s filing for bankruptcy and the announcement of the court’s opening decision. There are therefore signs of a new development for December.

The preliminary number of regular bankruptcies opened was nine percent below the previous year’s figure. “However, compared to the previous month, it rose by 18 percent,” according to the statistics office. “Together with an increase of five percent in November, this represents a departure from the previous course of steadily falling number of cases since the beginning of the corona pandemic.”