Editing Bankruptcy (section)

===European Union===
{{More citations needed section|date=May 2007}}
In 2004, the number of insolvencies reached record highs in many European countries. In [[France]], company insolvencies rose by more than 4%, in [[Austria]] by more than 10%, and in [[Greece]] by more than 20%. The increase in the number of insolvencies, however, does not indicate the total financial impact of insolvencies in each country because there is no indication of the size of each case. An increase in the number of bankruptcy cases does not necessarily entail an increase in bad debt write-off rates for the economy as a whole.

Bankruptcy statistics are also a trailing indicator. There is a time delay between financial difficulties and bankruptcy. In most cases, several months or even years pass between the financial problems and the start of bankruptcy proceedings. Legal, tax, and cultural issues may further distort bankruptcy figures, especially when comparing on an international basis. Two examples:
* In [[Austria]], more than half of all potential bankruptcy proceedings in 2004 were not opened, due to insufficient funding.
* In [[Spain]], it is not economically profitable to open insolvency/bankruptcy proceedings against certain types of businesses, and therefore the number of insolvencies is quite low. For comparison: In [[France]], more than 40,000 insolvency proceedings were opened in 2004, but under 600 were opened in Spain. At the same time the average bad debt write-off rate in France was 1.3% compared to Spain with 2.6%.

The insolvency numbers for private individuals also do not show the whole picture. Only a fraction of heavily indebted households file for insolvency. Two of the main reasons for this are the stigma of declaring themselves insolvent and the potential business disadvantage.

Following the soar in insolvencies in the previous decade, a number of European countries, such as France, Germany, Spain and Italy, began to revamp their bankruptcy laws in 2013. They modelled these new laws on Chapter 11 of the U.S. Bankruptcy Code. Currently, the majority of insolvency cases have ended in liquidation in Europe rather than the businesses surviving the crisis. These new law models are meant to change this; lawmakers are hoping to turn bankruptcy into a chance for restructuring rather than a death sentence for the companies.<ref>{{Cite news|url=https://www.wsj.com/articles/SB10001424127887323296504578398612178796882|title=Europe Builds Own Chapter 11|last=Ball|first=Deborah|date=2013-04-05|newspaper=Wall Street Journal|issn=0099-9660|access-date=2016-11-22|url-status=live|archive-url=https://web.archive.org/web/20161122222544/http://www.wsj.com/articles/SB10001424127887323296504578398612178796882|archive-date=2016-11-22}}</ref>

EU policy aims to ensure that "honest entrepreneurs" are afforded a second chance at business development. A faster start-up programme for people affected by bankruptcy operating in [[Denmark]] and a scheme to support [[Belgium|Belgian]] business owners and self-employed persons were highlighted in a 2008 [[European Commission]] ''Communication'' as good practice examples in this field.<ref>Commission of the European Communities, [https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52008DC0394 {{"'}}Think Small First': A 'Small Business Act' for Europe"], COM(2008)394 final, page 19, published on 25 June 2008, accessed on 14 July 2024</ref>