Bankruptcies on a monthly basis

January 2024: 942 bankruptcies

Enterprises
January 2024: 942 bankruptcies

In January 2024, 942 bankruptcies were registered by the business courts. This is a 2.7% increase compared to December 2023 (917).

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 January 2024 is higher than in the same month in 2023 (+17.9%) and in 2022 (+45.6%). In fact, we have to go back to January 2014 to see a higher number of bankruptcies in Belgium in that month (1,014).

At regional level, the number of bankruptcies has increased compared to December 2023 in the Brussels-Capital Region only (+42.4%). However, this number has increased in each region compared to both January 2023 and January 2022. In the Flemish region, it is actually the highest number of bankruptcies registered in January since 2013 (532 vs 520), while we have to go back to January 2020 to see a higher number of bankruptcies in that month in the Walloon Region (255 vs 224) and in the Brussels-Capital Region (233 vs 198).

Furthermore, the number of bankruptcies registered in January 2024 has increased in six economic sectors compared to December 2023. Three of these economic sectors also registered a higher number than in January 2023 and January 2022:

  • wholesale and retail trade with 209 bankruptcies, or the highest number since October 2023 (211);
  • other service activities, where 152 bankruptcies were registered, or the highest number since November 2023 (155);
  • manufacturing, energy with 44 bankruptcies, where we have to go back to November 2023 to see a higher number (49).

As regards the number of job losses registered in January 2024, it amounts to 2,773, i.e. an increase of 33.5% compared to December 2023 (2,077). However, this is a decrease of 29.7% compared to January 2023, but an increase of 64.1% compared to January 2022.

The number of job losses registered in January 2024 is higher than in December 2023 in each region. Although the number of job losses has decreased compared to January 2023 in the Flemish Region (-47.0%), it has increased in the Brussels-Capital Region (+38.9%) and in the Walloon Region (+20.4%). We have to go back to October 2023 to see a higher number of job losses in the Walloon Region (869 vs 674) and in June 2021 for the Brussels-Capital Region (652 vs 493).

Finally, the number of job losses registered in January 2024 increased in seven economic sectors compared to December 2023. Five of these economic sectors also registered a higher number than in January 2023 and January 2022:

  • construction with 488 job losses, or the highest number since September 2022 (597);
  • accommodation and food service activities, with 487 job losses, where we have to go back to October 2023 to see a higher number (535);
  • manufacturing, energy with 420 job losses, or the highest number since February 2020 (571);
  • other service activities with 399 job losses, or the highest number since November 2023 (412);
  • information and communication, with 54 job losses, where we have to go back to November 2023 to see a higher number (59).

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 2009. 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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