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Bankruptcy hitting the young and elderly

The Local · 24 Feb 2012, 06:00

Published: 24 Feb 2012 06:00 GMT+01:00

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An analysis by the Bürgel company, a subsidiary of Allianz, found that 136,000 Germans declared bankruptcy last year, a 2.2 percent decrease over 2010. But personal bankruptcy’s among people over sixty increased by 6.7 percent to 10,173 cases. People between 18 and 25 saw an increase in declared bankruptcies of about 1 percent.

The German state with the highest number of bankruptcies last year was North Rhine-Westphalia with 32 389, while Bavaria with 15,202, had the fewest.

Bürgel CEO Norbert Sellin attributed the struggles of the elderly to decreasing pensions and state-provided benefits which are forcing many to take menial jobs.

Among young people, Sellin blamed poor financial management – such as young people needlessly investing in too many electronic gadgets – and inexperience dealing with money.

“Although we have had a decline in bankruptcy numbers thanks to an improved situation in the labour market and a correspondingly favourable economic situation in Germany, the number of bankruptcies remain too high,” Sellin said in a statement.

Sellin added that he thought the number of bankruptcies would stay constant into 2012.

Despite some Germans’ financial problems, Germany’s personal bankruptcy rates remain much lower than in much of the West. Since 2009, more than 1 million Americans, for instance, have declared bankruptcy each year.

Story continues below…

And Germans on average save more than 11 percent of their income each year compared to savings Americans’ savings rate of just 5 percent, according to the Organisation for Economic Co-operation and Development.

The Local/mdm

The Local (news@thelocal.de)

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Your comments about this article

08:01 February 24, 2012 by Wrench
Not surprising. The prices on everything have gone sky high, yet, income has remained stagnate. The only thing that can be blamed is Greed.
08:46 February 24, 2012 by steve_glienicke
Agree the prices on everything is going sky high, and yet income is not increasing in parallel, personally i think it falls into 3 categories, Greed, Peer pressure (to be seen having the best) and down right stupidity (if you cannot afford a 350 euro TV in the 1st place, then dont take out credit to get it) i'am amazed how many i see falling into the last category down the local Media Markt 0% interest, pay over 12 months, thing is if you cannot afford to save 29 euro's a month to pay for it cash after 12 months, then how you gonna find the 29 a month on credit to pay for it over the next 12 months....
09:59 February 24, 2012 by elboertjie
@Wrench, if you wish to put blame, put it where it belongs: the fiat currency system we're all forced to use.

The primary reason why prices 'go higher' is because the existing money supply is being diluted by the creation of more money. This is done by bail-outs, stimulous packages and rescue funds; that is all new money that did not exist before, especially the interest charges on it.

By diluting the money supply, one needs more of it to purchase the same goods and this symptom is reflected in prices that 'go higher'. So, in affect, it is not prices that go higher, it is money that is losing value.
10:17 February 24, 2012 by Navigator_B
I suspect that another reason for the increase in bankrupcies is that banks are putting more pressure on borrowers to pay up. The banks are short of cash because of their bad loans to places like Greece, and to make up for that they are trying to recover money wherever they can, including their loans to German borrowers.
19:30 February 24, 2012 by raandy
steve_glienicke that was a good post.

It is always the young and old that fall from the way side.When things are good they way over spend on the best and the good life. Then things turn a bit sour and those on fixed incomes, become the victims and financial ruin dominates their lives.
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