Poles break another record for consumer bankruptcies

The number of consumer bankruptcies opened at the request of debtors since the beginning of this year has already doubled in October compared to last year. Currently, there are 5,024 such cases, but the actual need is estimated at around 50 thousand. As PMR Restrukturyzacje S.A. specialists convince, such a dynamics of bankruptcy growth is very good news, because thousands of people who have so far lived in a debt spiral and in the grey zone, avoiding bailiffs and enforcers, get a new chance, return to work and to a normal life in society. In Germany, more than 100,000 people declare consumer bankruptcy every year.

"Consumer bankruptcy", introduced in Polish law more than seven years ago, at the beginning had very serious limitations and could be applied in extremely rare cases. Since the end of 2014, when the legislator amended the provisions on bankruptcy of natural persons liberalising significantly the prerequisites for its declaration, the situation has significantly improved. Since then, there has been a marked increase in interest in this form of reduction or cancellation of the liabilities of individuals and, according to experts, this is very good news. The first year of the Act's operation in its amended form brought 2112 consumer bankruptcies, of which only 2 were filed in the first month.

As PMR Restructuring S.A. experts convince, a steady increase in the number of consumer bankruptcy petitions filed in Poland is a natural, normal and desirable trend. According to estimates by restructuring advisors, the natural average annual number of consumer bankruptcies in Poland should oscillate around 50 thousand. However, in much more affluent and twice as big Germany, the number of consumer bankruptcies oscillates around 100 thousand a year. Taking into account that our western neighbour is twice as populous, we can divide this number by half. Additional arguments in favour of a higher number of insolvencies in Poland, e.g. the fact that as a society we are poorer than Germany, we have not used this kind of entitlement before, etc., are also valid.

According to restructuring advisors, in the following years in Poland we can expect a steady increase in the number of applications for consumer bankruptcy, up to a ceiling of about 50 000 per year, when the process will start to stabilise.

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29 November 2016:
" Consumer bankruptcy: bankruptcy filings are on the rise