In 2022, considerably more people had to file for personal bankruptcy than the year before, reports the Credit Protection Association of 1870 (KSV1870). With 8,176 cases, there were 13.1 percent more private debt settlement procedures last year than in 2021, according to the current analysis of the creditors’ protections. The Credit Insurance Association expects the number of private bankruptcies to rise further this year. The average debt per bankruptcy in 2022 was around 111,000 euros.
However, this is unlikely to be the peak of personal bankruptcies: “The pandemic is still not a driver of private bankruptcies. Much more central this year, however, will be the extent to which rising costs will affect bankruptcy statistics. From the current perspective, we expect up to 10,000 private bankruptcies in the current year,” said Karl-Heinz Götze, head of bankruptcy at KSV1870.
The average debt level is falling
Although there were significantly more bankruptcies in 2022, the average debt level fell noticeably. While the average debt was still 121,000 euros in 2021, it was 111,000 euros last year. In 2019, just before the outbreak of the Corona crisis, the average debt per private bankruptcy amounted to 148,000 euros. “People are more careful during a crisis and think twice or three times about what they are spending their money on. That also has an effect on the debt,” explains Götze.
At the same time, the KSV documents confirm the long-term trend that men generally have higher debts than women. This is mainly due to earlier self-employment and a deterioration in income. In 2022, men had an average debt of 131,000 euros (2021: 154,000 euros). So while the average mountain of debt for men has fallen over the past two years, for women it has risen from €70,000 in 2021 to €80,000 in the previous year.
Two out of three bankruptcies affect men
However, at 62 to 67 percent, men account for about two-thirds of debt settlement proceedings in the states — regardless of how many private bankruptcies occur in any case. But there are big differences in the average mountain of debt accumulated in the respective states. Burgenland registered the highest debt per private bankruptcy last year with 183,000 euros, followed by Carinthia with 137,000 euros and Styria with 129,000 euros. Vienna is best off here with an overindebtedness of “only” 93,000 euros.
In addition, another trend can be observed: the average debt increases with age: last year, 4.7 percent of private bankruptcies were due to young people under the age of 25. Here, according to KSV1870, the average amount of debt has risen by 3,000 to 44,000 euros. By contrast, 25 to 40-year-olds were responsible for 37.3 percent of all private bankruptcies in Austria in 2022. This age group amounted to a debt of 69,000 euros per debtor. And the 41 to 60-year-olds were responsible for the most personal bankruptcies at 48.2 percent – they accumulated an average of 131,000 euros in debt. As shown by the data from KSV1870, the share of over-60s in private bankruptcies has fallen slightly to 9.8 percent. However, they owe about 200,000 euros per bankruptcy.
Expert: „Women often innocently kiss hands”
Women’s personal bankruptcy is often due to joint loans or guarantees for which they are liable if they separate. “Combined with the recently increased costs in almost all areas of life, this often puts women in particular in financial difficulties that they cannot get out of without help,” says Götze. “We see time and time again in court that women kiss their hands innocently and then have to vouch for the debts of their partner or ex-partner,” explains Götze.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
