Bankruptcy Filings Rise 7.4% Through August

Crédito y Caución | According to the tracking of bankruptcy proceedings published in the BOE (Official State Gazette), the business sector saw a 20% year-on-year increase in corporate insolvencies in August. For the year as a whole, this amounts to a 7.4% increase compared to the same period in 2024.

By the end of August, 4,034 bankruptcy proceedings had been initiated in Spain, compared to the 3,757 that had been requested by the end of August last year.

The bankruptcies are concentrated in Catalonia (26% of the total), Madrid (22%), the Valencian Community (14%), and Andalusia (10%). So far this year, insolvencies have been most prevalent in commerce (24% of the total) and the construction and real estate sectors (19%), followed by the manufacturing industry (15%) and hospitality (11%).

The largest increases, however, were recorded in the sub-sectors of extractive industries (200%), the textile manufacturing industry (85%), hotel accommodation (48%), energy (45%), and construction materials and healthcare, both with 42%.

A bankruptcy proceeding is a judicial process designed to manage and administer the assets of a company that cannot meet its debts. Its goal is to ensure that as many creditors as possible get paid, as well as to secure the continuity of the company. Corporate bankruptcy has disruptive effects on the productive fabric. When a company files for bankruptcy, it triggers a series of consequences such as job losses, supply chain disruptions, and a decrease in investor confidence. Furthermore, as suppliers or customers of other companies, the affected businesses can create a domino effect on credit risk, liquidity, and business solvency.