Both corporate and personal – remain at high levels.
Official figures released today show that the overall level of insolvencies in the third quarter of 2011 – both corporate and personal – remain at high levels.
For those of us involved in the insolvency profession, the statistics come as no surprise. At Moorhead Savage, we are seeing steady numbers of new enquiries regarding debt and cash flow solutions for people and companies that are finding life difficult in the current economic climate.
Analysing the detail within the figures, it is interesting to note that the number of personal insolvencies has decreased from the same period last year, when the numbers were close to their highest ever. However, the number of individuals going bankrupt, entering into Individual Voluntary Arrangements (IVAs) or Debt Relief Orders (DROs) is still higher than at any time before 2009, with a total of 30,219 individuals becoming formally insolvent. However, this figure masks the true extent of the problem as it does not include the huge number of people who are struggling with debt on their own or the estimated 500,000 people who are using an informal ‘debt management plan’ in an attempt to manage their debt problems.
In relation to companies, there has been a 6.5% increase in the number of companies going into liquidation and a 10% overall increase in the number of other corporate insolvencies – in this context meaning administrations, receiverships and Company Voluntary Arrangements (CVAs). This suggests that there is a general increase in the amount of insolvency activity across the board, as the ongoing economic malaise continues to make life difficult for business owners.
An important point to make is that the number of insolvencies is not at catastrophic levels. Despite the relatively high figures, the rate of insolvency is still sustainable: in the past 12 months, 0.7% of all registered, active companies went into liquidation. In the same period, 1 in 361 people became insolvent. These are not high numbers overall – but that doesn’t matter if one of them is you.
As always, we are here to help. Call us on 01709 331300 for a friendly, free of charge and no-obligation chat about how we can help.