Latest insolvency figures reveal mixed fortunes for individuals and businesses - Palmers Solicitors

Latest insolvency figures reveal mixed fortunes for individuals and businesses

Latest insolvency figures reveal mixed fortunes for individuals and businesses

Latest official Government figures have revealed that in England and Wales the number of businesses choosing to apply for Creditors’ Voluntary Liquidations (CVLs) has risen but compulsory liquidations are lower than before the pandemic.

The statistics released by The Insolvency Service, which confirm there were a total pf 1,486 registered company insolvencies in December 2021, show that CVLs are 20 per cent higher than in the same month in 2020 – and, perhaps not surprisingly 33 per cent higher than pre-pandemic, in December 2019.

However, the number of other types of company insolvencies, such as compulsory liquidations have maintained a downward trend.

The number of individuals filing for bankruptcy has also decreased. In December 2021, 434 bankruptcies were registered, which was 47% lower than December 2020 and 60% lower than December 2019.

Instead, the trend There were 1,872 Debt Relief Orders (DROs) in December 2021. Following changes to the eligibility criteria on 29 June 2021 including an increase in the level of debt at which people can apply for a DRO from £20,000 to £30,000, DRO numbers were higher between July and December 2021 than in previous months since the start of the COVID-19 pandemic.

The number of DROs registered in December 2021 was 51% higher than December 2020 but remained lower than pre-pandemic levels (10% lower than in December 2019).

There were, on average, 6,648 IVAs registered per month in the three-month period ending December 2021, which is 16% lower than the three-month period ending December 2020 but 15% higher than the three-month period ending December 2019.

From the start of the coronavirus (COVID-19) pandemic until mid-2021, overall numbers of company and individual insolvencies have remained low when compared with pre-pandemic levels.

Luke Morgan, a Director with Palmers Solicitors, who specialises in insolvency law, said: “The latest statistics make for interesting reading as it would appear that, rather than waiting for creditors to force their hand, businesses and individuals are being proactive and are taking the initiative when dealing with debt.

“There are a number of options open to those facing either corporate or individual financial distress, so it is important to seek advice from a professional who can help you to choose the most appropriate way forward, depending on your particular circumstances.”

For further help and advice, please get in touch with us.