Russia will face a tsunami of the individuals’ bankruptcies

The Institute of Bankruptcy of Individuals began its work almost five years ago, and since then it has been gaining momentum. According to data, posted on the “Fedresurs” Federal Register website, the number of bankruptcies of citizens has increased eightfold. The leading regions are Moscow and the Moscow region, as well as the Krasnodar Territory.

In the first quarter of 2020, the number of bankruptcies increased by 70% compared to the same period of the previous year and it is not the limit, the experts say.

The coronavirus pandemic and the general crisis in the economy of Russia are not the only reasons for it. The massive increase in the number of bankruptcies of individuals since the beginning of the year is associated with other macroeconomic processes - a decrease in the size of salaries, as well as the enlargement of big companies by reducing or even ruining the small and medium-sized businesses. What is more, the citizens are increasingly resorting to the bankruptcy procedure, since over the years of work in this area, a definite model has been formed, mechanisms have been perfected, and it became possible to pay for the procedure by installments. In addition, more and more people perceive bankruptcy as a real opportunity to legally get rid of the financial burden.

The problems, associated with coronavirus, will also affect the statistics of the number of bankruptcies of the individuals, but this will happen closer to the middle - the end of the year.

According to the experts, the number of bankruptcies will only grow, increasing rapidly. This is facilitated by a monthly lack of business activity in April: people and businesses will simply not be able to pay the loans.

According to the most optimistic estimates, the economic consequences of the pandemic spread will be felt in the next two years, during which many people will experience financial difficulties. Read the article to know, what the country should wait for.