A surge in corporate and personal insolvencies has plagued Germany throughout 2025, reaching levels unseen in over a decade, according to a forecast released by Creditreform. The data reveals a concerning trend of economic fragility impacting both businesses and consumers, prompting renewed scrutiny of government policies and lending practices.
A total of 23,900 companies registered for insolvency, marking an 8.3 percent increase compared to 2024 (22,070 cases). While the growth rate is significantly lower than the dramatic spikes observed in 2023 and 2024 (22.9 percent and 22.5 percent respectively), the sheer volume of failures underscores systemic vulnerabilities within the German economy. Patrik-Ludwig Hantzsch, head of Creditreform’s economic research, emphasized that many businesses are burdened by significant debt, struggling to secure new credit and grappling with persistent structural challenges, including volatile energy prices and increasingly complex regulatory frameworks. This pressure is disproportionately impacting the Mittelstand, the backbone of the German economy, pushing many into liquidation.
The crisis extends beyond the corporate sphere. Personal insolvencies also rose, climbing 6.5 percent to approximately 76,300 cases – the highest number since 2016. Hantzsch attributes this to widespread consumer debt, with an estimated 5.67 million German citizens currently classified as over-indebted. This highlights a potential failure of social safety nets and the long-term consequences of inflationary pressures eroding purchasing power.
The brunt of the corporate collapses has fallen on small businesses employing up to ten individuals. Around 19,500 of these enterprises filed for insolvency, a substantial increase from the previous year and accounting for 81.6 percent of all corporate failures. While larger corporations (employing over 250 individuals) experienced a more moderate increase, the disproportionate impact on micro-enterprises raises concerns about the sustainability of Germany’s traditionally decentralized business model and demands a re-evaluation of support mechanisms for the smallest businesses. The healthcare and care sectors have been particularly hard hit, experiencing several high-profile bankruptcies.
The financial repercussions for creditors – suppliers and banks – remain substantial. Creditreform estimates damages for 2025 at approximately €57 billion, closely mirroring the previous year’s €59.1 billion. The outstanding claims threatened per insolvency case average over €2 million. An estimated 285,000 employees are impacted by these corporate failures, though this figure represents a slight decrease from the previous year, likely due to preemptive measures taken by some affected companies.
Significant increases in insolvency rates have been observed in the manufacturing (+10.3 percent) and retail (+10.4 percent) sectors. The construction industry demonstrates a more moderate increase of 4.7 percent, while the service sector witnessed a comparatively restrained rise of 8.4 percent. Nonetheless, insolvency numbers across these key sectors remain roughly one-third higher than pre-pandemic levels (2019), signaling a protracted recovery period.
A persistent negative trend in corporate creditworthiness is evident across numerous sectors. The healthcare and social services sector is experiencing the most severe deterioration. Mining, however, currently boasts the strongest credit rating. The hospitality sector, previously devastated by the COVID-19 crisis, remains at the bottom of the creditworthiness spectrum, despite a slight improvement. The lingering effects of the pandemic, combined with ongoing inflationary pressures and rising interest rates, continue to severely restrict the creditworthiness of businesses in this vital segment of the German economy. The data paints a concerning picture, prompting calls for targeted governmental intervention and a broader reassessment of economic policies designed to bolster resilience and prevent further deterioration.