Statistics Denmark has just released its January figures for bankruptcies and foreclosures, showing a sharp increase in liquidations, but a drop in foreclosures.

January saw a seasonally adjusted 511 bankruptcies compared with 449 in December 2011 – the highest number of monthly bankruptcies in any month in the past 12. Some 851 people were employed in the companies concerned.

“The reason for the increase in bankruptcies is the recession that hit our most important trading partners and our domestic economy in late summer last year. The drop in demand has undoubtedly affected sales opportunities,” says Danske Research’s Jens Nærvig Pedersen.

But while bankruptcies were sharply up, foreclosures were sharply down at a seasonally adjusted 408 in January compared with 467 in December, a drop of 13 per cent and with the figures bucking the upward trend since July 2011.

"The drop in interest rates is probably the explanation. But you shouldn’t put too much in the figures for a single month as there are fluctuations. In many areas it is still difficult to sell housing and unemployment is still relatively high,” says Danske Bank Personal Finance Economist Las Olsen.

“We do not expect an overall drop in foreclosures this year,” he adds.

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