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Insolvency Law

Expert guidance on all aspects of corporate and personal insolvency

10 MAY 2013

Latest Insolvency Figures: First Quarter 2013

I apologise for the slight delay in posting these figures. I have been off adventuring! The Insolvency Service (IS) published the figures last Friday. Here are the details:

"Corporate Insolvency

There were 3,619 compulsory liquidations and creditors’ voluntary liquidations in total in England and Wales in the first quarter of 2013 (on a seasonally adjusted basis). This was a decrease of 5.3% on the previous quarter and 15.8% less than the same quarter a year ago. This was made up of 1,043 compulsory liquidations (up 11.8% on the previous quarter but down 13.4% on the corresponding quarter of the previous year), and 2,576 creditors’ voluntary liquidations (which were down 10.9% on the previous quarter and down 16.7% on the corresponding quarter of the previous year). Additionally, there were 935 other corporate insolvencies in the first quarter of 2013 (not seasonally adjusted) comprising 236 receiverships, 557 administrations and 142 company voluntary arrangements. In total these represented a decrease of 27.5% on the same period a year ago.

Personal Insolvency

There were 25,006 individual insolvencies in England and Wales in the first quarter of 2013. This was a decrease of 12.9% on the same period a year ago. This was made up of 6,663 bankruptcies (which were down 27.0% on the corresponding quarter of the previous year), 7,219 Debt Relief Orders (DROs) (which were down 8.6% on the corresponding quarter of the previous year) and 11,124 Individual Voluntary Arrangements (IVAs) (which were down 4.9% on the corresponding quarter of the previous year). Bankruptcy numbers have been impacted by the introduction of DROs from April 2009, amongst other factors. Numbers of DROs are higher than total bankruptcies for the third quarter, while Bankruptcy Orders have been lower than IVAs for the last eight quarters. The accompanying detailed tables include seasonally adjusted series for bankruptcy orders and IVAs. The series for DROs is not currently long enough to formally seasonally adjust.

In the first quarter of 2013, 5,379 bankruptcies were made on the petition of the debtor (representing 80.7% of total cases); the level of debtor petition bankruptcies has been following a generally decreasing trend since the beginning of 2009 when there were 17,606 (86% of the total). Creditor petition bankruptcy numbers have also been falling over a similar period, though less rapidly and less consistently. The percentage of bankruptcy orders where the individuals were self-employed was 23.9% in the fourth quarter of 2012 (first quarter 2013 figures for self-employed bankrupts are not yet available); higher than in earlier years.

Long Term Perspective

In the twelve months ending Q1 2013, 1 in 154 active companies (or 0.7% of all active registered companies) went into liquidation, down from 1 in 144 the previous quarter. As Figure 4 shows, the liquidation rate remains low compared to a peak of 2.6% in 1993, and the average of 1.2% seen over the last 25 years.  It should be noted that the number of active companies has changed considerably over this period; there were 2.6 million active registered companies in Q1 2013; this compares with only about 900,000 in the early 1990s and less than 800,000 in 1986.

In the twelve months ending Q1 2013, 1 in 419 adults became insolvent. This is down from 1 in 405 in the previous quarter. As Figure 4 shows, the individual insolvency rate displayed a steeply upward path (with some fluctuations) from 2004 until mid-2010 and is currently still elevated compared to the annual average of around 1 in 1,600 adults (0.1%) seen over the last 25 years."

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