My friend Michelle is broke. I had no idea it was this bad. She now has to file for personal bankruptcy. I didn't know anything about it until last night, when she explained it to me.

Personal bankruptcy is an option for people who consistently spend more money than they earn. In Germany it's reportedly almost 7 million people. I was very surprised and at the same time shocked by that high number.

I can well imagine that the coronavirus crisis will soon make things much worse. Many people have been thrown off balance by this surprise crisis. Then all that's left is personal bankruptcy, like with Michelle. As Michelle explains to me, though, personal bankruptcy is also an opportunity at the same time:

personal bankruptcy
  • A fresh start in a new life after a debt write-off
  • Out of the downward spiral
  • The burden is lifted

After six years at most, you're debt-free again. Michelle says the law in Germany is changing as of October 1, 2020. She still has to find out more. It's all still very new for her too.

Personal bankruptcy is no walk in the park

I said to Michelle: "That's great, then you'll be rid of all your worries soon!" But she looked at me sadly and said it's not that simple. "If personal bankruptcy were that easy, my dear, everyone would do it right away."

The government has its hands in it and there are strict rules with oversight. Everything she earns above a certain amount will be taken from her and distributed to creditors. She'll have to sell her car and ultimately live very frugally. No new clothes or other extravagances. She can forget about traveling for now, too. But that's exactly the point, she tells me: she wants to change her life. In the future she wants to get by on her money.

personal bankruptcy

Personal bankruptcy - it doesn't stay hidden from the outside world

Opening up is a big step for her. At the same time, it's especially important to her that the people around her know. Sooner or later everyone would notice when she can no longer generously open her wallet for herself. Quickly grabbing dinner out in the evening is no longer possible like that. She'll have to save up so she can treat herself once in a while. Because there isn't much left to live on once she's subtracted her fixed costs. But there's no other way. Her parents are out of the question. Her mother works in a bakery and her father works as an accountant at a small company. She now has to be brave and sort out her situation on her own.