The number of private bankruptcies in Austria is a third higher than in the previous year – the reason for this is inflation. More and more people are struggling with debt and experts are monitoring the situation “with great concern”.
As the Austrian debt advisory service explained on Thursday, inflation is causing more and more people to fear for their livelihoods. In the first half of the year alone, the number of first contacts with the advice center increased by 10.5 percent compared to 2021. In addition, approximately 34 percent more private bankruptcies were reported. But according to the debt advice, this is not the peak of the effects of inflation. The consequences are only noticeable after a delay and only begin.
Extreme point not reached yet
Due to the high cost of living, more and more people are entering a crisis, the number of bankruptcies has increased in all states. Yet the wave of bankruptcies has not yet passed its peak, says Clemens Mitterlehner, director of ASB Schuldnerberatungen GmbH, the umbrella organization for state-recognized debt relief in Austria. The experts view the situation “with great concern” because “these rising bankruptcy numbers have barely taken into account the effects of inflation. The effects of the price increase will only lead to bankruptcies with a delay”.
Ask for unlimited help packs
Insolvency law currently allows debt relief within three years. But that also does not help much, since a private bankruptcy is no longer affordable for many. All costs must be covered by income, which is the only way to avoid new debt, explains Mitterlehner. For private individuals, the option of an abridged bankruptcy procedure is only possible until 2026. This does not apply to entrepreneurs, for example, and debt assistance therefore requires that no differentiation is made here, entirely in accordance with the principle of equality.
Previous packages „unsatisfactory“
In order to prevent private bankruptcies in the future, a more targeted distribution of subsidies for people with low incomes is crucial. This would stimulate household consumption, which would strengthen the economy. According to the Momentum Institute, which is close to the unions, inflation this year will cost the poorest tenth of Austrians 1.25 monthly incomes.
The pro-business Agenda Austria disagrees and continues to insist that the inflation packages are sufficient. Mitterlehner is critical of this, as the magnitude of the current wave of bankruptcy will only take “full effect” in the long run.
Source: Krone
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
