After years of declines in citizens’ over-indebtedness, the tide has turned, according to data from the credit agency Creditreform. The company announced on Wednesday that 5.65 million people in Germany were over-indebted this year. Compared to the previous year, this is a decrease of 233,000 people. But this is due to a statistical effect. If you take that out and calculate the number using the same method as 2022, the result is an increase of 17,000. It was said that there had been “a hidden trend reversal”. Over-indebtedness will probably increase more significantly next year. The last time there was an increase in over-indebtedness was in 2018.
Creditreform justified the development with higher living costs, increased interest rates and the weak economy including higher unemployment. Anyone who cannot meet their financial obligations in the long term is considered over-indebted. During Corona times, over-indebtedness fell because interest rates were very low and people were sometimes more thrifty and had less opportunity to spend money. In addition, government aid supports companies and thereby secures jobs. For its “Debtor Atlas,” Creditreform evaluates anonymized data from official registers, online retailers and other sources.
