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Bankruptcy
The WestFar EastModern insolvency legislation and debt restructuring practicesFraudIn the United StatesChaptersIn CanadaDuties of trusteesCreditors meetingsConsumer proposals in CanadaIn EuropeIn the United KingdomIn the Netherlands
The WestFar EastModern insolvency legislation and debt restructuring practicesFraudIn the United StatesChaptersIn CanadaDuties of trusteesCreditors meetingsConsumer proposals in CanadaIn EuropeIn the United KingdomIn the Netherlands
In Europe
During 2004, new all-time high values have been reached in many European countries. In France, company insolvencies rose by more than 4%, in Austria by more than 10% and in Greece by even more than 20%. However the official bankruptcy (insolvency) statistics have only a limited explanation. The official statistics only show the number of insolvency cases. There is no indication of the value of the cases. This means that an increase in bankruptcy cases does not necessarily entail an increase in bad debt write-off rates for the economy as a whole.There is a time delay between payment problems or written-off claims and when a business is actually declared bankrupt. In most cases, several months or even years pass between the supply of products on account and the start of respective bankruptcy proceedings.
Legal, tax-related but also cultural aspects lead to a further distortion of the explanation, especially when compared on an international basis. Two examples:
* In Austria, more than half of all bankruptcy proceedings in 2004 were not even opened due to insufficient funding to settle some outstanding amounts.
* In , more than 40,000 insolvency proceedings were opened in 2004, but under 600 were opened in Spain. At the same time the average bad debt write-off rate in France was 1.3% compared to Spain with 2.6%.
The insolvency numbers of private individuals also does not show the whole picture. Only a fractional amount of the households as heavily indebted decides to file for insolvency. Two of the main reasons for this are the stigma of declaring themselves insolvent and potential professional disadvantage.