Bankruptcy figures increased slightly in October from August and September, yet remain low. According to the IWH Bankruptcy Update, 750 companies were reported by the courts as bankrupt last month. During the same month last year, the number of companies declared bankrupt was approximately 25% higher. The total number of jobs impacted in October 2020 was also lower in relation to prior months. The largest 10% of companies declaring bankruptcy in August employed a total of 9,000 individuals, according to IWH research. In all other months since May, this figure has been above 13,000.

At the end of September, the obligation to file for bankruptcy was reinstated for the vast majority of insolvent firms. Steffen Müller, IWH’s head of Insolvency Research Unit, notes: “The reinstatement of the filing obligation has only led to a moderate increase in bankruptcy declarations. A wave of bankruptcies has failed to materialise.”

IWH outlook for the coming months remain unchanged, despite the German government’s recent decision to implement a partial lockdown. According to Müller, a moderate increase in bankruptcy statistics is likely, but this should be viewed as a “return to normalcy, rather than a bankruptcy wave.” Various factors will prevent a surge in bankruptcy figures, including government assistance and a “wait and see” attitude among companies, given announced changes to bankruptcy law, Müller explains.