German corporate bankruptcies are on track to reach a level not seen in over a decade in 2025, highlighting enduring struggles in the economy. Roughly 23,900 companies are expected to file for insolvency this year, up 8.3% from 2024 and marking the highest count since 2014, according to Creditreform, a leading credit agency. The uptick comes as overall economic activity remains weak after two years of contraction, with many firms saddled by heavy debt, limited access to new loans, and burdens from elevated energy costs and regulatory pressures. According to Patrik-Ludwig Hantzsch, head of economic research at Creditreform, these pressures particularly jeopardize small and medium-sized enterprises, potentially crippling many operations.
The 2025 rise is predominantly driven by micro-businesses—those with up to ten employees—which account for about 81.6% of the total insolvencies this year. While the individual losses from these small cases may be smaller, the cumulative financial impact on creditors such as suppliers and banks remains significant. Creditreform projects total financial losses from insolvencies at around €57 billion in 2025, slightly down from €59.1 billion in 2024, with the average cost per insolvency exceeding €2 million.
Employment is also affected: roughly 285,000 people are expected to be impacted by corporate failures in 2025, a marginal decline from 291,000 in 2024. Looking ahead to 2026, the outlook remains cautious despite government plans to boost growth through infrastructure and rearmament investments. Bernd Buetow, CEO of Creditreform, stresses that Germany’s economy is losing competitiveness, and ongoing high costs, bureaucracy, and weak overall demand are likely to continue driving insolvencies.
The pressures aren’t limited to businesses. Personal insolvencies are forecast to rise by 6.5% in 2025, reaching around 76,300 cases—the highest level since 2016. The primary driver is increasing over-indebtedness among households, with around 5.67 million Germans currently considered over-indebted. Factors such as rising living costs, job losses, and growing unemployment are pushing many households toward their financial limits.
In short, while a mix of policy initiatives and market adjustments may eventually improve performance, the immediate landscape shows that both firms and households are navigating a challenging period of high costs, tighter credit, and economic uncertainty.
