In the third quarter of this year alone, 5067 consumer bankruptcies were announced. The insolvent debtors’ creditors lost PLN 146.5 million, according to data from the National Debt Register. This year will be record-breaking in terms of the number of bankruptcies. Experts estimate that by the end of December, their number may exceed 20,000.
The number of consumer bankruptcies in Poland in 2023 has significantly increased, reaching an alarming level. According to the Central Economic Information Center, by the end of September of this year, consumer bankruptcy was announced in relation to 15,594 people. This is almost as much as in the whole year of 2022, when there were 15,622 bankruptcies. Everything indicates that by the end of the year the barrier of 20,000 bankruptcies will be exceeded. If this happens, it will be a record in Poland’s recent history.
From 1 January 2015, over 89,000 people have already declared bankruptcy. So far, the record number of bankruptcies was noted two years ago when there were 18,205.
Bankruptcy is not the result of short-term financial problems. This is the result of financial problems accumulating over several years. 49 percent of debtors were already in the National Debt Register database two years before the bankruptcy was declared. As the declaration of insolvency approaches, more debtors appear in the register. A year before bankruptcy, there were 54 percent of them, and half a year before – almost 60 percent.
Adam Łącki, the President of the National Debt Register, noted, “People who have declared bankruptcy have left behind nearly PLN 147 million in debts. The problems of most of them were noticeable well in advance. Unfortunately, not all creditors took advantage of this knowledge. Those who did not, are counting their losses today.”
Among the over 5,000 debtors who declared bankruptcy in the third quarter of 2023, the largest group are people aged 36 to 45. They owe their creditors over PLN 42.4 million, and the total number of their unpaid financial obligations reaches almost 3,000. The next group are people aged 46-55 who have 2,256 unpaid obligations totaling nearly PLN 36 million. In third place are debtors aged 26 to 35, who owe their creditors PLN 23.7 million.
The fewest bankruptcies in the third quarter were declared by people on the cusp of their adult life. 66 debtors aged 18 to 25 have to repay just under PLN 1.3 million. This amount consists of 173 unpaid financial obligations.
Most bankruptcies were declared by debtors from cities, mainly those with over300,000. residents and from 20 to 50,000 inhabitants. Together, they represent 40.4% of all bankrupts, leaving behind debts of over PLN 66 million.
Considering the value of indebtedness of bankrupts through the prism of the map of Poland, the Mazowieckie voivodeship leads. 437 people who declared bankruptcy in the third quarter left behind as much as PLN 24 million in debts. Almost PLN 21.4 million belongs to debtors from the Silesian voivodeship, who represent the largest group of bankrupts, 565 people. The third place belongs to the Greater Poland voivodeship. There were 413 people declaring bankruptcy and recorded in the KRD, leaving behind over PLN 17.2 million in debts. The least indebted people were from the Podlaskie province – it was just under PLN 2 million. There were 62 of them in the third quarter.
People declaring bankruptcy are mainly indebted to financial and insurance institutions (mainly banks, loan companies, insurance, debt collection companies, and securitization funds). Insolvent consumers owe them over PLN 138.4 million. Debtors also have outstanding bills of nearly PLN 1.5 million to telecommunications operators. Meanwhile, unpaid alimonies, which, as is known, are not written off in consumer bankruptcy, amount to PLN 3.8 million.
Insolvency is a gradual process, it happens slowly, not suddenly. The causes of today’s bankruptcies problems should be sought 2-3 years ago. In some cases, inflation, which began to rise sharply in October 2021, had an influence on it. This certainly accelerated the increase in problems with regulations. It does not mean that they could not have been avoided.
The President of the debt collection company Kaczmarski Inkasso, Jakub Kostecki explains, “The behavior patterns of most people, who ultimately end up as bankrupts, are repeatable. First, they underestimate the problem – they assume that it is temporary, but at the same time they do nothing to solve it. So, for example, they take on further obligations, even though they already have complications with the repayment of previous ones. They also reject the help of negotiators from debt collection companies, who want to help them come up with a viable repayment plan in an agreement with creditors. Companies thus start directing matters to court, and the bailiff takes over the collection. There is no room for negotiation and flexibility. Most often, there is also not enough property left to repay the debt. And what remains is to declare bankruptcy.”
However, declaring bankruptcy does not close the case. Some debts are indeed written off, but not all. For example, alimonies, which still need to be paid, are exempted. The debtor’s property is auctioned off, and at the same time the court may order the bankrupt to repay the remaining part of the debt even for a further seven years.
