After completion of bankruptcy proceedings, nearly 1.9 billion euro in unpaid debts remained in 2004. The unfavourable economic circumstances in 2004 pushed up the number of bankruptcies to 50 percent more than in 2002. The amount remaining in unpaid debts was even nearly two-thirds more than in 2002.
Debts by legal form
With an amount totalling 1.6 billion euro, private companies accounted for 85 percent of total unpaid debts. This is the equivalent of nearly half a million euro debt per finalised bankruptcy. For one-man businesses the debt was 133 million euro, nearly 160 thousand euro per business on average. For private persons the total unpaid debt remaining was 143 million euro, 81 thousand euro per bankruptcy.
Bankruptcies often caused by mismanagement
Nearly 6 thousand bankruptcies were finalised in 2004, of which nearly three-quarters as a consequence of liquidation. In three out of ten finalised bankruptcies of companies and other legal bodies, mismanagement was the cause of the bankruptcy. Another three in ten were caused by economic factors. One in nine bankruptcies were the result of a bankruptcy of the holding, or parent or subsidiary companies.
Nearly one in three one-man businesses went bankrupt as a result of mismanagement. Just over one in eight one-man businesses went bankrupt because of economic reasons. In addition to business factors, sometimes the private spending behaviour of the owner is not adjusted in time to his/her changed income situation.
Finalised bankruptcies by cause, excluding cause unknown, 2004
Bankruptcies at own request
Nearly 40 percent of bankruptcy proceedings were requested by creditors. One in three bankruptcies were filed for by the business or person concerned. For private companies more than half of bankruptcies were requested by the companies themselves. For one-man businesses, this share was smaller. More than 1,200 bankruptcies of private persons were the result of failed debt restructuring schemes.
Finalised bankruptcies by filing party, 2004
Intentional disadvantaging of creditors
One eighth of proceedings completed in 2004 concerned bankruptcies where creditors were intentionally disadvantaged. The amount involved was more than 400 million euro: 20 percent of the total of unpaid debts.
Seventeen percent of companies and institutions going bankrupt deliberately disadvantaged creditors; half of these cases were criminal offences.
Dick Boer and Bill Swaager