Germany is facing a concerning resurgence in household debt, signaling a deepening financial strain on its citizens. Creditreform, a leading debt collection agency, reported a rise of 111,000 individuals (over 18) now classified as over-indebted as of 2025, totaling 5.67 million. This represents an 11.04% increase compared to the previous year and marks the first significant uptick in over-indebtedness since 2018.
The over-indebtedness ratio has climbed to 8.16%, a subtle but notable rise reflecting a broader economic malaise. Patrik-Ludwig Hantzsch, head of economic research at Creditreform, described the trend as an “unmistakable turnaround” attributing it to the depletion of financial buffers accumulated during years of cautious saving. “Multiple crises-the pandemic, soaring energy prices and persistent inflation-have taken their toll and now the consequences are manifesting” he stated.
What is particularly alarming is the broadening of the affected demographics. Traditionally, over-indebtedness has been concentrated in specific risk groups. However, Creditreform’s data reveals a concerning expansion across almost all social strata. A new category – “lifestyle over-indebtedness” – is emerging, comprising individuals with average or even above-average incomes who are resorting to borrowing to maintain their accustomed living standards in the wake of prior austerity.
“Over-indebtedness is no longer a fringe phenomenon” warns Hantzsch. “We are witnessing a growing number of people who, on the surface, are financially comfortable, but who have dangerously overestimated their resilience”. Both ‘soft’ (payment difficulties without legal action) and ‘hard’ (legal processes like debt collection and court orders) forms of over-indebtedness are concurrently increasing – a dynamic not seen since 2017.
Rising levels of debt are disproportionately affecting younger individuals (under 30) grappling with consumerism and online spending and older citizens (over 60) struggling to cope with rising living costs and limited pension income. “We are seeing a new division in over-indebtedness” explains Bernd Bütow, managing director of Creditreform. “Young people are stumbling through consumer habits, while the older generation battles structural scarcity.
The geographical impact is equally troubling. Over-indebtedness ratios have increased in 69% of districts and independent cities – double the rate of the previous year. While economically struggling regions of North Rhine-Westphalia are particularly affected, rises are also evident in parts of Bavaria and Saxony, underscoring a nationwide negative trend.
Creditreform’s assessment points to eroding financial resilience as the principal driver of this escalating debt crisis. Years of economic shocks have depleted savings and shaken consumer confidence. “Many showed remarkable discipline in recent years” admits Bütow, “but resilience is not an inexhaustible resource. Reserves are depleted, trust is shaken and over-indebtedness is returning.
Looking ahead, Creditreform anticipates the negative trend will likely persist in 2026, potentially exacerbated by rising interest rates, continued inflationary pressure and a weakening labor market. “Over-indebtedness threatens to become a real societal issue once again” warns Hantzsch, implicitly placing the onus on policymakers to address the underlying economic vulnerabilities contributing to this growing crisis.