In recent months, we, and other insolvency professionals, have expressed concern about the rising number of insolvencies registered each month. Although the pressures facing both business and personal finances were predictable, the scale of the problem was not foreseen.
The Insolvency Service report for March 2022 reveals that twice as many company insolvencies were registered than in March 2021, the numbers being 2,114 and 999 respectively.
Creditors Voluntary Liquidations were again the largest insolvency type but it should be noted that, although numbers were relatively small, the number of compulsory liquidations was four times higher than in March 2021. Details are set out in the table below:-
Case Type March 2022 Feb 2022 March 2021 March 2020
Creditors Voluntary Liquidation 1,844 1,329 882 911
Compulsory Liquidation 131 76 33 175
Administration 129 109 74 131
Company Voluntary Arrangement 10 3 10 18
Previous Newsletters have commented on the pressures facing businesses as Covid 19 assistance is withdrawn and liabilities incurred during the pandemic have to be repaid. However, the scale of the problem is greater than most commentators predicted. In all areas of the economy, costs are increasing to the extent that, with few exceptions, higher raw material, energy and other costs are having to be passed on to customers rather than being absorbed.
In addition to the terrible human suffering caused by the conflict in the Ukraine, there have been severe interruptions in the supply of grain, cooking oil and other foodstuffs which are now being reflected in retail prices in our supermarkets. As a consequence of the “cost of living crisis”, the number of personal insolvencies is also on the increase, as below:-
Case Type March 2022 Feb 2022 March 2021 March 2020
Individual Voluntary Arrangement 8,385 6,994 8,317 4,031
Debt Relief Order 2,512 2,444 1,594 1,919
Bankruptcy 633 598 1,042 1,487
Source: Insolvency Service
Should it be that, as widely predicted, interest rates are to rise this week, a further burden will affect both business and domestic finances in the months ahead.
If you can foresee issues for your family or your business, an honest appraisal of your financial position can help you to take measures to mitigate problems. The time to get advice is now. The Insolvency Practitioners and staff at TH Financial Recovery would be more than happy to discuss concerns in a free confidential, no pressure and no obligation conversation with you.
Call 01282 332222 or email to alleviate your stress and help plan your future.