Courts announce more and more consumer bankruptcies

The number of companies entering the restructuring path is growing. During nine months, 457 restructuring proceedings were initiated in Poland. However, not only entrepreneurs but also natural persons have problems caused by the Covid-19 pandemic. Only in September, consumer bankruptcy was announced in relation to 1,366 people, and their total number is to exceed 12,000 by the end of this year. The coronavirus has also changed the realities of the work of courts and lawyers, as well as their clients, who, in the face of prolonged hearings, increasingly seek a settlement with the other party.

“As a result of the pandemic, we have definitely more cases regarding consumer bankruptcy, which the statistics are slowly beginning to confirm. People just couldn't stand the lockdown, they didn't have that many savings. The same applies to enterprises – bankruptcies or suspension of operations are also, unfortunately, more and more common,” Anna Stasiak-Apelska, a legal advisor at Cioch & Partnerzy Law Office, said.

According to KUKE data, 32 companies declared bankruptcy in September, which means an increase of 33 percent compared to the previous month, but in annual terms, a decrease of 35 percent. The number of insolvencies (bankruptcy and restructuring proceedings) reached 124, i.e. 35 percent higher than in August and by 23 percent more than last year.

Statistics show that the number of companies undergoing restructuring has increased significantly since the beginning of the pandemic. In September, the number of newly announced restructurings amounted to 92, recording an increase of 35 percent per month and by as much as 77 percent on an annual basis. About 70 percent of such proceedings is a simplified restructuring that, under the new regulations, entrepreneurs can use from June this year. The first record was set in July when the number of announced restructuring (71) was the highest in the history of KUKE's research and increased by almost 100 percent compared to last year.

(Newseria)