Formerly self-employed lead Austria’s private insolvencies

Failed small-business owners once again accounted for the largest share of private insolvencies in Austria, the first time in six years, ORF reported, citing a study by the Kreditschutzverband von 1870, a creditors’ protection association. The trend was particularly pronounced in western Austria.

Former self-employment rose by 1.6 percentage points compared with the previous year and became the most common cause of private insolvency. At the same time, cases attributed to personal indebtedness fell by 3.2 percentage points.

The association said 8,766 debt-regulation proceedings were opened across Austria during the previous year, 0.6 percent fewer than in the year before.

In Salzburg and Tyrol, former self-employment was the cause in 35 percent of cases in each province, meaning it triggered more than one in three private insolvencies and occurred more often than the national average.

“The financial consequences of former self-employment and personal indebtedness have shaped the causes statistics for years,” said Karl-Heinz Götze, head of insolvency at KSV1870. He said it was positive that some people had recently managed their finances more carefully, making personal indebtedness slightly less common as the main cause.

Reduced income, including job loss, remained the third most common cause at 16 percent. People aged over 40 were disproportionately affected, while consumer debt continued to be the main reason for private bankruptcy among those aged 40 and under.