Private Bankruptcies in Austria

Personal bankruptcy offers over-indebted persons the opportunity to obtain a debt discharge under certain conditions. From 1995 to 2022, a total of around 205,000 personal bankruptcy petitions were filed in Austria. The annual number of applications rose steadily until the end of the 2000s. Since then, larger jumps in the number of cases have been observed, particularly in connection with reforms and changes in the political framework, such as during the COVID-19 crisis. This project, funded by the OeNB's Jubilee Fund (#18649), analyses determinants of personal bankruptcies in Austria since its introduction in 1995. The vast majority of studies on personal bankruptcies relate to the USA, whereas the situation in Austria has hardly been researched. We aim to address this gap by applying time series and panel econometric methods to Austrian data on consumer bankruptcies. We study their relation to policies, macroeconomic and sociodemographic variables. Our results indicate relatively large effects of bankruptcy rules (i.e., the changing conditions for debt discharge) and consumer debt levels.