Bankruptcies on a monthly basis

April 2024: 925 bankruptcies

Enterprises
April 2024: 925 bankruptcies

In April 2024, 925 bankruptcies were registered by the business courts. This is a 9.7% decrease compared to March 2024 (1,024).

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 April 2024 is higher than in the same month in 2023 (+13.2%) and in 2022 (+49.2%). This is the highest value in April in Belgium since 2019 (934).

At regional level, the number of bankruptcies has increased compared to March 2024 in the Brussels-Capital Region only (+6.7%). This figure has also risen in each region compared to both April 2023 and 2022. This is actually the highest value in April in the Walloon Region since the previous record in 2019 (267 versus 263), while we have to go back to April 2013 to see a higher number of bankruptcies in that month in the Flemish Region (511 versus 498) and to April 2019 for the Brussels-Capital Region (250 versus 160).

Since the beginning of this year, the business courts pronounced 2,224 bankruptcies in the Flemish Region. This value exceeds the previous record registered in 2013 (1,980) by 12.3%.

Furthermore, the number of bankruptcies registered in April 2024 has increased in three economic sectors compared to March 2024. Indeed, this number went from:

  • 61 to 75 in transportation and storage (+14), where we have to go back to June 2023 to find a higher number (76);
  • 206 to 214 in construction (+8), or the highest number since February 2024 (229);
  • 3 to 5 in agriculture and fisheries (+2), or the highest number of bankruptcies since February 2024 (10).

Five economic sectors registered a higher number than in both April 2023 and 2022:

  • construction with 214 bankruptcies, or the highest number for April, since the previous record in April amounted to 178 bankruptcies in 2013;
  • trade where 190 bankruptcies were registered, or the highest number in April since 2019 (213);
  • other service activities with 146 bankruptcies, where we have to go back to 2019 to see a higher number during that month (150);
  • transportation and storage with 75 bankruptcies, or the highest number for April since the previous record in 2023 (59);
  • manufacturing, energy where 48 bankruptcies were registered, or the highest number in April since 2015 (51).

After four months in 2024, the number of bankruptcies registered in Belgium is a record in two economic sectors:

  • construction with 867 bankruptcies, or 21.3% more than in 2023 (715), the previous record;
  • transportation and storage where 251 bankruptcies were registered, i.e. 17.8% more than the previous record in 2023 (213).

As regards the number of job losses registered in April 2024, it was 5,108, or slightly more than double the number registered in the previous month (2,387). This value, which exceeds the previous record set in September 2013 (4,128), is mainly due to the bankruptcy of a major car manufacturer in the Flemish Region.

The number of job losses registered in April 2024 increased compared to March 2024 in the Flemish Region (+238.3%) and in the Walloon Region (+0.4%). This figure has also risen in each region compared to both April 2023 and 2022. This is actually the highest value in April in the Flemish Region since the previous record in 2013 (4,049 versus 1,568), while we have to go back to April 2019 to see a higher number of job losses in that month in the Walloon Region (727 versus 719) and in the Brussels-Capital Region (656 versus 340).

Finally, the number of job losses registered in April 2024 increased in five economic sectors compared to March 2024. Three of these economic sectors also registered a higher number than in both April 2023 and 2022:

  • manufacturing, energy with 2,605 job losses, or the highest number of job losses in April since the previous record in 2013 (468);
  • trade with 606 job losses, where we have to go back to 2012 to see a higher number during that month (621);
  • construction with 550 job losses, or the highest value in that month since 2012 (607).

In addition to this press release and the supplementary report (NL - FR), Statbel also publishes more detailed monthly figures which can be broken down by municipality, by NACEBEL 2008 class or even dated back to the year 2000. These figures are available on be.STAT via the tab ‘Figures’ of this publication.

When interpreting the 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. 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 tax administration and the NSSO spared, by a de facto moratorium, enterprises by not declaring them bankrupt due to tax and social debts. This system also remained in force after 1 February 2021 before summons resumed from October 2021 for the NSSO and around March 2022 for the tax administration, where summons gradually resumed in several provinces.

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, many measures have been adopted - at federal, regional and local level - to support enterprises during the Covid-19 crisis. For example, the NSSO granted 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 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 30.06.2022.

Finally, new measures have been adopted until 31 March 2023 to support enterprises during the energy crisis. At the level of the NSSO, enterprises could, among other things, apply for a voluntary payment plan, while energy-intensive enterprises could make use of a special temporary unemployment scheme due to economic reasons for energy-intensive companies.

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. 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 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. This system also remained in force after 1 February 2021 until October 2021 as far as the NSSO is concerned, while it is still in force for the tax administration.

Moreover, the judicial summer recess takes place in the months of July and August. The courts remain open during this period, but the number of hearings are reduced. That is why the bankruptcy rates are lower in this period.

Moreover, several measures were in force - at federal, regional and local level - to support enterprises during the Covid-19 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.

Finally, new support measures emerged recently to support companies during the energy crisis. At the level of the NSSO, enterprises can apply for an amicable payment plan, among other things, while energy-intensive companies can make use of a special system of temporary unemployment due to economic causes for energy-intensive companies.

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

An enterprise is bankrupt if two conditions are met: on the one hand, the enterprise has ceased to pay, i.e. it no longer pays its creditors. On the other hand, the loans to the enterprise have also stopped. In other words, the company has lost the trust of its creditors. The bank then refuses, for example, to grant it a new loan. A bankruptcy always concerns one enterprise. Thus, a legal arrangement in which several persons set up a company, such as a general partnership, can only lead to one bankruptcy.

Job losses

The loss of full-time and part-time jobs is provided by the NSSO. The job loss is determined on the basis of the last known situation of the enterprise, i.e. at the time of the bankruptcy. This total job loss consists of the sum of 3 separate categories (loss of full-time jobs + loss of part-time jobs + loss of jobs of salaried employers). Salaried employers are employers that pay themselves a salary. Information on the number of salaried employers is not available at the NSSO and consequently Statbel must make an estimate of it. For this, Statbel bases itself on the estimation rule that Eurostat cites in the document "OECD Manual on Business Demography Statistics" and this for the following 2 enterprise categories:

  • Self-employed (Type1): 1 salaried employer
  • Partnerships and other legal forms (Type3): 2 salaried employers

Based on the results of January 2022, after a thorough analysis of the legal forms available in Belgium, Statbel decided, in accordance with the international estimation rule mentioned above, to allocate 1 to 3 salaried employer(s) in limited liability companies (Type2) with retroactive effect, according to the Belgian legal provisions on the establishment of a company (previously "0" salaried employers were allocated). An identical approach is already used in other statistics (e.g. business demography, VAT-registered enterprises, etc.).

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