The Insolvency Service released the Quarter 4 2015 Insolvency Statistics on 29th January 2016, this release incorporating estimated figures for the whole of 2015.
Company Insolvency
Although Company Insolvencies were at their lowest level since 1989, 14,629 companies did enter into insolvency, this decrease was mainly driven by a drop of 23{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} in compulsory liquidations. Creditors Voluntary Liquidations, (CVL), decreased by 4{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} to 9,981, the lowest annual total since 2007. The number of Company Voluntary Arrangements dropped by 35{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34}, to just 357, the lowest total since 1994.
Personal Insolvency
Individual insolvencies decreased by 19{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} in 2015, the lowest total since 2005. This decrease was mainly driven by a drop of 23{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} in the number of people entering Individual Voluntary Arrangements, (IVA), the total being 39,993. Individual Voluntary Arrangements comprised 50{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} of individual insolvencies in 2015 compared to 53{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} in 2014.
15,797 bankruptcy orders were made in 2015, a decline of 22{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} on the previous year. This number is likely to have been affected by an increase in Debt Relief Orders in Quarter 4 due to a change in eligibility criteria in 2015.
Comment
Although the numbers of insolvencies has declined, there are still large numbers of companies and individuals facing serious debt problems. It must be borne in mind that these numbers relate to formal insolvency proceedings and do not any account of companies and individuals who have been forced to negotiate “time to pay schemes” or other informal debt management arrangements.
Early advice from professional advisors and licensed insolvency practitioners would enable directors and individuals to discuss and understand the options available to them whilst these are still achievable.