Personal bankruptcies rise by 70 percent in Russia for procedural reasons, and the COVID-19 spike hasn't even hit yet

Between January and March of 2020, Russian courts acknowledged the bankruptcies of 22,400 citizens, including independent contractors. That figure represents a 68-percent increase over the same time period in 2019, RBC reported, citing statistics from the Unified Federal Registry of Bankruptcy Declarations (Fedresurs). In the whole of 2019, almost 69,000 Russians successfully declared bankruptcy.

Fedresurs head Alexey Yukhnin said this quarter’s spike in bankruptcies is due to better-developed court procedures and a broader awareness of the bankruptcy process among Russian citizens. However, he did not rule out the possibility of yet another future spike in bankruptcies due to the COVID-19 pandemic’s economic impact.

Vladimir Yefremov, a partner in the law firm Arbitrage.ru, said he expects a burst of bankruptcy applications due to the pandemic two to six months from now. Vladimir Zhuravchak, a partner at the firm Sotbi, predicted that bankruptcies will spike beginning in August. Statistics reflecting the effect of COVID-19 on Russian bankruptcies will only be available a year from now, however.