160 bankruptcies in week 3
During the week from 17 to 23 January included (week 3), the business courts pronounced 160 bankruptcies, resulting in a total of 356 job losses.
The figures for week 3 reveal an increase in the number of bankruptcies and job losses compared to the previous week.
During the first 3 weeks of 2022, the business courts pronounced 395 bankruptcies. This figure is 14.2% higher than in the first 3 weeks of 2021.
Job losses per bankruptcy are 12.6% lower in 2022 than in the previous year. During the first 3 weeks of 2022, 1.87 jobs were lost per bankruptcy while this ratio amounted to 2.14 in the same period in 2021.
This is what emerged from the weekly bankruptcy figures produced by Statbel based on the orders of business courts. These interim weekly estimates make it possible to quickly observe the first trends.
The number of bankruptcies and job losses for the first 3 weeks of the year
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.
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 National Employment Office, the entire temporary unemployment due to the coronavirus can be considered as temporary unemployment due to force majeure ‘corona’ until 31.03.2022.
All these public measures described above have had a moderating impact on the number of bankruptcies declared since March 2020.
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.
Timing of publication
The weekly bankruptcy figures are available three working days after the reference week. As the reference week runs from Monday to Sunday included, Statbel publishes the bankruptcies of the previous week every Wednesday.
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.
Statbel calculates the job losses related to a bankruptcy based on the latest information available from the NSSO.
For the production of the weekly bankruptcy figures, Statbel uses one reference week. This reference week always runs from Monday to Sunday included. The annual results based on the reference week may therefore differ slightly from the annual figures, as the calendar year does not usually start on a Monday.