Consumer advocates criticize bankruptcy law reform

Released on 27.09. 2021

  • Consumer advocates criticize the insolvency law reform as a “reform”. Photo: Alexander Heinl

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Consumers are released from their remaining debts after a bankruptcy after three years. The faster new start is hindered by Schufa entries that are too long, criticize consumer advocates.

Frankfurt / Main (dpa) – Consumer advocates see an urgent need for action even after the insolvency law reform.

Consumers have been bankrupt since October 1st 2020 after three years instead of the previous six years, which was largely the norm. In this way, they should be able to take an active part in social and economic life again more quickly. “However, this is counteracted by the fact that after the end of the procedure, the data of those affected will be stored by credit agencies such as Schufa for another three years”, criticized Christoph Zerhusen from the North Rhine-Westphalia consumer center.

«As a result, those affected often have problems finding a new apartment, getting loans or ordering via mail order. They feel branded and inquiries about the consequences of the long storage periods are increasing, ”reported Zerhusen. Consumer advocates are calling for the entry to be shortened to a maximum of one year, but ideally to six months. “Those affected have to get a real second chance,” said Zerhusen. “Otherwise the reform remains a reform.”

Significant increase in personal bankruptcies

Credit agencies collect personal data from consumers in order to assess their creditworthiness evaluate. This data is important for financial institutions, online shops or mobile phone providers, for example, to check the customer’s creditworthiness before signing a contract.

The number of consumer bankruptcies skyrocketed in the first half of the year increased by 51, 1 percent compared to the same period of the previous year. According to the latest data from the Federal Statistical Office 27. 304 consumers file for bankruptcy. Experts had expected an increase. Many over-indebted consumers are likely to have waited for the bankruptcy law reform. The shortening of the remaining debt discharge, which also affects companies, applies retrospectively to all procedures that were applied for from October 1st 2020.

In addition, according to Zerhusen’s assessment, debt counseling centers in the first corona lockdown 2020 advised by phone or e-mail, but many advice centers were closed to the public. “It is required by law that debt counseling must take place in person,” explained the consumer advocate.

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