Colombia faces rising debt costs as personal insolvencies surge to record levels

Bancolombia warns that Colombia's public finances remain deteriorating despite debt‑management operations. While bond buy‑backs reduced external interest payments by about 1.5 % of GDP in 2025, higher costs of new internal issuances and inflation have driven interest expenses up, with projected payments rising from 27.2 billion pesos in 2025 to 42.7 billion in 2026. Net public debt is expected to peak at 59.6 % of GDP in 2029 before a gradual decline.

At the same time, requests for personal insolvency have jumped 76 % between 2024 and 2025, and could exceed 26,000 in 2026 – a historic high. The surge follows the 2025 enactment of Law 2445, which broadened eligibility, introduced virtual procedures and relaxed several requirements. Experts note that the increase threatens credit‑market stability, may raise loan‑interest rates and strain the capacity of notaries and conciliation centers.

Both trends underscore mounting fiscal pressures on households and the government, highlighting challenges for debt sustainability and financial‑sector resilience in Colombia.