Vicious circle of inter-company indebtedness

Kamen Kolev, deputy chairman of the Bulgarian Industrial Association

Registered an increase in bankruptcies is more than 2 times compared to last year. This is normal for this period because of expected deterioration in the solvency and indebtedness of the enterprises. This led to such insolvency proceedings.
I think the trend will continue and even increase because of the performances of the crisis, which is expected to intensify during the winter months and continue through early next year. The growth of inter-company debt is a major problem for most companies. Many companies, even if they are correct when they provide goods and services but not being paid at the agreed time, began to experience difficulties with their payments.
In this vicious circle has many businesses. Figuratively speaking, they have to take some money while they owe to a third company. The problem is that these funds can not be intercepted, so the company can go to zero.
The question is how to bring these claims more quickly. We advise companies where late payments and commercial disputes, to include in their contracts arbitration clause to allow for any difficulties, then go to arbitration once within 2-3 months. Because we all know that legal proceedings can drag on for years.
The fact is that almost all sectors have suffered because of over-indebtedness, so can not be defined separate branches, because they are interrelated. Among the most affected firms are in manufacturing, because it is strongly bent production, others are wood processing, textiles, construction, trade. In these sectors, the reduction is over 30%.
Currently, there are still employers who take action to protect jobs and Mitigating the effects of the crisis, but it will not last long. I expect year after the beginning of the crisis measures should be exhausted and the process to accelerate as more companies go bankrupt.