Number of Bankruptcies Declared among Citizens Increased by 47%

According to Fedresurs estimates, for the first half of 2020, the number of bankruptcies of companies decreased by 26% and amounted to 4,500 legal entities against 6,100 in the same period in 2019. The opposite trend is observed in cases of bankruptcy of citizens. For six months of 2020, the number of citizens (individuals and sole proprietors) declared bankrupt increased to 42,720 people, which is 47.2% more than in the first half of 2019 (29,000 people), according to Kommersant.

The largest decrease in the number of corporate bankruptcies occurred in the second quarter of this year – by 39.8% (to 1.89K legal entities), in the first quarter the decrease was not so significant – by 11.2% (to 2.61K). The number of personal bankruptcies in the first quarter increased by 68% (to 22.36 thousand people) compared with the same period last year. In the second quarter, their number increased only by 29.6% (up to 20.36K people).

In many aspects, such statistics are associated with the coronavirus pandemic and the self-isolation regime announced in connection with it, which also led to a limitation of the work of the judiciary.

“Courts in the period of restrictions from March 19 to May 11 rarely considered bankruptcy cases of companies and less than usual in relation to citizens. Already at the end of the second quarter, having returned to the standard operating mode, the courts partially compensated for the shortfall of decisions in the previous months,” explains Alexei Yukhnin, head of Fedresurs.

Yukhnin also recalls that some of the bankruptcies have now been postponed due to the moratorium that applies to more than 2 million legal entities and entrepreneurs, while only 400 companies and 50 individual entrepreneurs refused it.

According to the results of the first half of the year, bankruptcy of legal entities, as before, is most often initiated by creditors – in 74.6% of cases, in second place is the Federal Tax Service of the Russian Federation with 15.9%, and debtors with 9% in the third. Most rarely, the insolvency of a company is claimed by its employees – 0.5% of all cases. As for citizens, almost always they themselves initiate their bankruptcy – 94% of cases, creditors – 4.8% of cases, Federal Tax Service – 1.2%.

Most of all legal entities during this time traditionally went bankrupt in Moscow – 852, 309 companies were declared bankrupt in the Moscow Region, 293 were in third place in St. Petersburg, followed by the Sverdlovsk Region (152) and the Republic of Tatarstan (141). Not a single enterprise went bankrupt in the first half of the year in the Republic of Tuva, Chukotka Autonomous Okrug, Chita Oblast, Nenets Autonomous Okrug.

Among citizens, the residents of Moscow and the Moscow Region most often went bankrupt – 2.45K people and 2.19K people, respectively, followed by the Samara region – 1.98K people, St. Petersburg – 1.85K people and Krasnodar Territory – 1.82K people. The smallest number of bankrupt citizens is in the Republic of Ingushetia (nine people), the Chechen Republic (four people) and the Chukotka Autonomous Okrug (two people), and in the Nenets Autonomous Okrug – not a single bankrupt.

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