Small businesses welcome extended moratorium on bankruptcies

Small businesses welcome extended moratorium on bankruptcies
Credit: Belga

The union of small businesses (UCM) has welcomed a decision taken by ministers last week to extend an existing moratorium on bankruptcies until 31 January 2021.

The proposal was presented by justice minister Vincent Van Quickenborne (Open VLD) and minister for small business David Clarinval (MR) and approved by fellow ministers. However, it was not reported while it was being sent to the Council of State for a ruling on its legality.

The proposal will still have to be voted on by parliament before coming into force.

The first moratorium was decided at the start of the Covid-19 crisis in March, by the government of Sophie Wilmès, to run until 17 June. After that deadline had passed, the authorities gave a tacit extension, with no bankruptcy proceedings being initiated for social or fiscal debts.

Every bankruptcy is one too many. We see that the support measures have helped healthy companies get through the first corona shock,” Van Quickenborne said.

By reintroducing a moratorium on bankruptcies, we can keep many of our healthy companies in calm waters, monitor their situation closely and take appropriate measures when alarms go off,” said Van Quickenborne.

The problem is particularly acute for businesses that were forced to close their doors during the first lockdown in March, as well as those affected by the measures in force now.

In the beginning, pressure for a moratorium came from Unizo, another organisation representing small businesses. With a second lockdown, the danger is even greater, as most businesses ate through their reserves during the first lockdown.

According to a report produced at the end of last month by the Economic Risk Management Group (ERMG), 8.1% of small businesses polled said they considered bankruptcy to be ‘probable’ or ‘very probable’.

For us, a moratorium is a vital measure,” Unizo director Danny Van Assche told De Tijd.

Now that the crisis is raging in full force again, we must use all possible means to prevent companies that were financially healthy in March from disappearing overboard.”

The proposal now before the Council of State also includes a continued moratorium on the court-ordered seizure of assets of individuals, including salary, by creditors. That too was introduced at the start of the crisis, but expired in June.

We want to arm our economy and our citizens in this second wave against possible bankruptcies and financial difficulties due to the crisis," said Van Quickenborne.

The current situation is very precarious, but we will not leave anyone behind in this difficult period.”

Alan Hope

The Brussels Times

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