Bankruptcies on a monthly basis

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.

Purpose and brief description

Every month, Statbel calculates the bankruptcy figures for the previous month. The figures are published around 15 days after the reference month. On this date, the bankruptcy figures are final. In addition to the monthly figures, Statbel can also make interim weekly estimates. These weekly figures make it possible to quickly observe the first trends. In addition to the figures on the number of bankruptcies, Statbel also always calculates the related job losses. For the job losses, Statbel uses the latest information available from the NSSO.

The bankruptcy statistics produced by Statbel are based on data from the Crossroads Bank of Enterprises (CBE) and the statistical business register. When interpreting the figures, account should be taken of the fact that there is some delay between the cessation of the economic activity and the declaration of bankruptcy by the business court. As a result, an economic impact is only visible in the figures with some delay.

Because of the measures taken during the Covid-19 crisis and the related lockdown, business courts and registries limited their activities until 18 May 2020. Furthermore, until 17 June 2020, a temporary moratorium was in force in order to protect the enterprises that were in good health before 18 March 2020 against the consequences 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 the 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.

Population

Enterprises subject to the law of 11 August 2017 adding a new Book XX ‘Insolvency of Enterprises’ to the Economic Law Code, and introducing the definitions specific to Book XX and the implementing provisions specific to Book XX in the Book I of the Economic Law Code, as published in the Belgian Official Journal on 11 September 2017. Title VI of Book XX contains the rules on bankruptcy.

Frequency

Monthly

Timing of publication

The publication of the monthly bankruptcy figures takes place around 15 days after the reference month.

Definition

Bankruptcy

A bankruptcy is pronounced as soon as an enterprise meets two conditions:

  • The enterprise is no longer able to pay its bills;
  • The enterprise does not find any new credits.

A bankruptcy always concerns one enterprise. A legal arrangement in which several persons have set up the same enterprise is counted as one bankruptcy.

Job losses

Statbel calculates the job losses related to a bankruptcy based on the latest information available from the NSSO.

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