September 2022: 968 bankruptcies

September 2022: 968 bankruptcies

In September 2022, 968 bankruptcies were registered by the business courts. This is an increase of 197.8% compared to August 2022.

Statbel, the Belgian statistical office, also publishes a detailed report with the major developments of the monthly figures on bankruptcies. This report is available here (NL - FR).

The number of bankruptcies registered in September 2022 is higher compared to the same month in 2021 (+44.0%) and in 2020 (+32.8%) but lower than the number of bankruptcies in September 2019 (-10.5%).

For each region, the number of bankruptcies registered in September 2022 is higher compared to August 2022. Only in the Flemish Region does this number (596) also represent an increase compared to September 2019 (+19.7%). One has to go back to June 2022 to find a higher number of bankruptcies in the latter region (612).

The number of bankruptcies registered in September 2022 increased in all sectors compared to August 2022. The strongest increases in the number of bankruptcies are registered in the following three sectors:

  • 81 to 241 in construction (+160), which is the highest number of bankruptcies since 2000 (start of data series);
  • 64 to 206 in trade (+142), or the highest number of bankruptcies since June 2022 (220);
  • 58 to 162 in the ‘horeca’ sector (+104), where one has to go back to June 2022 to find a larger number (179).

The number of jobs lost due to bankruptcies in September 2022 was 2,463. This is an increase of 188.7% compared to August 2022. This also means increases of 70.6% and 30.9% respectively compared to September 2021 and September 2020 but a decrease of 1.6% compared to September 2019.

Although the number of jobs lost in September 2022 represents an increase in each region compared to August 2022, only the Flemish Region counted more job losses compared to September 2019 (+18.8%). In this region, one has to go back to August 2020 to find a higher number (1,795 versus 1,478).

The number of jobs lost in September 2022 due to bankruptcy increased in all activity sectors compared to August 2022. The largest increases in job losses due to bankruptcies are registered in the following three sectors:

  • 105 to 541 in trade (+436), which is the biggest job loss since December 2021 (637);
  • 192 to 597 in construction (+405), where one has to go back to November 2020 to register more job losses (672);
  • 170 to 398 in other service activities (+228), or the largest job loss since June 2022 (616).

Along with this press release and the supplementary report (NL - FR), Statbel also publishes more detailed monthly figures with additional breakdowns at municipal level, by NACEBEL class 2008 or with historical figures going back to 2009. These bankruptcy figures are available on be.STAT via the "Figures" tab of this publication.

When interpreting these figures, it should be taken into account that there is a certain delay between the termination of the economic activity and the declaration 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 federal 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 immediately submit 11 documents, but only 3. The remaining documents can be provided during the procedure. Second, the procedure no longer requires a publication in the Belgian Official Journal. This enables the mediator to meet with the creditors in complete discretion and thus prevent them from demanding a rapid repayment of their claims before an agreement has been reached. Third, the procedure for judicial reorganisation by amicable agreement is encouraged by a tax exemption which, until then, only applied to procedures for judicial reorganisation by court order. The provisions relating to the first two pillars of the reform would initially be in force up to and including 30 June 2021, but were extended until 16 July 2022 by the Royal Decree of 24 June 2021 extending Articles 2, 4 and 12 of the law of 21 March 2021 amending Book XX of the Code of Economic Law and the Income Tax Code 1992.

Between these two moratoriums, the FPS Finance and the NSSO spared, by a de facto moratorium, enterprises by not declaring them bankrupt due to tax and social debts. This arrangement remained in place after 1 February 2021, until the NSSO resumed issuing summons from October 2021 and the tax authorities in various provinces around March 2022.

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

Finally, various measures were in force - at federal, regional and local level - to support enterprises during this crisis period. For example, the NSSO granted amicable payment plans with a maximum duration of 24 months for the payment of all contributions and sums due for the year 2020. And at the level of the National Employment Office, the entire temporary unemployment due to the coronavirus or the conflict in Ukraine could be considered as temporary unemployment due to force majeure ‘corona’ until 30 June 2022.

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