March 2021: 599 bankruptcies

Enterprises
March 2021: 599 bankruptcies

599 enterprises were declared bankrupt in Belgium in March 2021.

Bankruptcies registered in March resulted in 1,445 job losses: 916 full-time jobs, 296 part-time jobs and 233 salaried employers.

The sectors with the highest numbers of bankruptcies in March: 223 bankruptcies in transportation and other service activities, 142 in construction, 114 in wholesale and retail trade and 89 in accommodation and food service activities.

At regional level, there were 311 bankruptcies in Flanders, 182 in Wallonia and 106 in Brussels.

When interpreting these figures, account should be taken of the fact that there is a certain delay between the termination of the economic activity and the notification of bankruptcy by the business court. As a result, the economic impact is only reflected in the figures after a certain period of time.

Moreover, because of the Covid-19 crisis, many business courts and registries operated at reduced capacity and limited their activities until 18 May 2020. Furthermore, a Royal Decree leading to the freezing of bankruptcy proceedings before the courts was in force until 17 June 2020, in order to protect the enterprises that were healthy before 18 March 2020 from the effects of the Covid-19 crisis.

Then, on Friday 6 November 2020, the government approved a new moratorium on bankruptcies until 31 January 2021 in order to protect enterprises that were obliged to temporarily close their doors following the ministerial decree published on 1 November 2020 amending the ministerial decree of 28 October 2020 on emergency measures to limit the spread of the coronavirus (Covid-19).

As compensation for the end of this second moratorium, the government implemented a reform based on 3 pillars in order to make the access to the procedure for judicial reorganisation more flexible. First, the procedure was simplified, by no longer requiring enterprises to give immediately 11 documents, but only 3. The other documents can be delivered during the procedure. Second, the procedure no longer requires a publication in the Belgian Official Journal, which allows the mediator to meet with creditors in complete discretion and thus prevent them from demanding the rapid repayment of their claims before an agreement has been reached. Third, the procedure for judicial reorganisation by amicable agreement are encouraged by a tax exemption that was until then only applied to procedures for judicial reorganisation by court order.

Between these two moratoriums, the tax administration and the NSSO spared, by a de facto moratorium, enterprises by not declaring them bankrupt due to tax and social debts. According to the Minister of Justice, this system also remains in force after 1 February.

Moreover, there was the judicial recess in July and August. Courts remained open during this period but the number of hearings was reduced. This is why our figures on bankruptcies are usually lower during this period.

Finally, many measures are also currently in force - at federal, regional and local level - to support enterprises in these times of crisis. For example the NSSO grants voluntary payment plans for a maximum duration of 24 months for the payment of all contributions and sums due for the year 2020. At the level of the FPS Finances, support measures, such as the 15 % reduction in payroll tax for temporary unemployment and the tax exemption for overtime in critical sectors, are in force until 30.06.2021.

All these public measures described above have had a moderating impact on the number of bankruptcies declared since March 2020.