159 bankruptcies in week 4
During the week from 23 to 29 January included (week 4), the business courts pronounced 159 bankruptcies, resulting in a total of 374 job losses.
So the figures for week 4 reveal a decrease in the number of bankruptcies and job losses compared to the previous week.
During the first 4 weeks of 2023, the business courts pronounced 647 bankruptcies. This figure is 12.7% higher than in the first 4 weeks of 2022.
The number of bankruptcies and job losses for the first 4 weeks of the year
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.
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.
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.
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.
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.).
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.