The Trap of High Prices: Debts Haunt Germans and Bankruptcy Knocks at Their Doors

SadaNews - Rising energy and food prices are pushing more consumers to borrow and declare bankruptcy. According to data from the information provider "Kreif", there were 107,816 recorded personal bankruptcies in Germany last year, an increase of 7.8 percent compared to 2024. The numbers are expected to continue rising. Frank Schlein, the executive director of "Kreif Germany", stated that the financial situation for many individuals remains tense, adding: "Despite a greater willingness to save in principle, savings are no longer sufficient for many households to absorb rising costs," explaining that the average debt of those affected reached around 15,000 euros. "Kreif" expects to record 110,000 personal bankruptcies in Germany by the year 2026. This would surpass the level of 2021, which saw just over 109,000 cases due to a legal amendment, where in 2020, many bankruptcy applications were postponed to benefit from a reduced duration of debt discharge, effective from January 1, 2021, which shortened the process duration from six years to three years. According to "Kreif", the main reasons for personal bankruptcy remain unemployment, self-employment failure, separation or divorce, and health issues. The age group of 18 to 20 years recorded the highest relative increase in cases in 2025 compared to 2024, with a rise of 52.6 percent, followed by the group of 21 to 30 years with an increase of 28.6 percent. "Kreif" attributed one reason to impulse buying on installment plans amidst enticing offers such as "Buy now, pay later", which is also accompanied by the ability to shop quickly online, along with offers for interest-free financing of purchases. Consumer advocates continually warn that people overestimate their financial capacity and engage in purchasing through borrowing beyond their ability to repay.