Thuringia in crisis: record number of corporate bankruptcies!

Thuringia in crisis: record number of corporate bankruptcies!

The economic situation in Thuringia is alarming. According to recent reports, including from Thuringia24, a total of 96 companies filed for bankruptcy from January to March 2024. This represents an increase of 18 bankruptcies compared to the previous year. Motor vehicle dealers, repair shops and various industrial companies have been hit particularly hard, as they are heavily burdened by increased costs and sales problems on export markets.

The Chambers of Commerce and Industry emphasize that high operating costs are the key challenge for many companies. In Thuringia, around 600 jobs are directly affected by the bankruptcies. However, insolvency does not always mean the final end: some investors are interested in continuing to run affected companies in the form of a restart. Nevertheless, the economic situation remains tense and there are fears that further bankruptcies could follow.

An increase in bankruptcy proceedings

In the first quarter of 2024, a total of 640 insolvency proceedings were opened in the Thuringian district courts. Of these, 419 were consumer bankruptcies, a dramatic increase compared to the previous year. The total debt from these consumer bankruptcies amounts to approximately 127.5 million euros, with an average debt of 51,000 euros per case. Creditors' claims are more than twice as high as in the previous year, which highlights the precarious financial situation of many households.

In contrast, there has been a decline in the number of bankruptcy filings by over-indebted households, which have fallen by almost a fifth compared to the same period last year, according to an additional report by The Thuringians. These figures show that the general conditions for consumers in Thuringia are diverse and are sometimes improving and deteriorating at the same time.

A varying picture of corporate insolvencies

The number of corporate bankruptcies initiated due to excessive indebtedness or insolvency rose by 17 to a total of 78 cases in the first quarter of this year. This corresponds to an increase of around 28 percent compared to the same period last year. The construction industry has been particularly hard hit, with 20 companies filing for insolvency, meaning that almost one in four insolvent companies comes from this sector. In total, there were 521 insolvency proceedings during this period, which represents a decrease of approximately eleven percent compared to the insolvencies in the first quarter of 2023.

Although the insolvency proceedings give the impression of a partial economic collapse, many companies with sufficient assets continue to initiate proceedings to service creditors' claims. The expected creditor claims are around 62 million euros, while average unpaid bills in consumer bankruptcies are 41,000 euros.

Overall, Thuringia is facing enormous economic challenges, which are characterized by bankruptcies in almost all areas. Developments in the economy will continue to be closely monitored in order to be able to react quickly to upcoming changes.