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The Latest Insolvency Statistics

The latest statistics have been released by the Insolvency Service, which will provide an insight into the impact of COVID-19 on both company insolvencies and individual insolvencies.

The data relates to insolvencies between April 2020 to June 2020.

Companies in Q2 of 2020

  • Overall numbers of company insolvencies in England and Wales fell in Q2 2020 by nearly one quarter when compared with Q1 2020, and by one-third when compared with the same quarter in 2019.
  • The company liquidation rate fell in the 12 months ending Q2 2020 to 36.9 per 10,000 active companies in England and Wales, from 40.7 per 10,000 active companies seen in both the 12 months ending Q1 2020 and the same quarter in 2019.
  • Compulsory liquidations saw the largest percentage decrease in Q2 2020. Compulsory liquidations fell 72% from Q1 2020 and fell 76% when compared with the same quarter in 2019.

Individuals in Q2 of 2020

  • Overall numbers of individual insolvencies in England and Wales increased by 12% in Q2 2020 when compared with Q1 2020, and by 7% when compared with the same quarter in 2019.
  • The rate of individual insolvency for the 12 months ending Q2 2020 remained similar to the rate seen in the 12 months ending in the same quarter in 2019 (rate of 25.9 and 26.0 per 10,000 adults respectively).
  • The numbers of bankruptcies and debt relief orders (DROs) decreased in the latest quarter. Bankruptcies fell by over 40% and DROs fell by around 30% when compared with both the previous quarter and the same quarter in 2019.

 

Summary

The trends highlighted by the statistics are effected by the government measures in response to COVID-19, including the operational issues encountered by the courts and the enhanced financial support for companies and individuals. Further, the significant fall in company insolvencies is highly likely to be due to the temporary restrictions on the use of statutory demands and certain winding-up petitions from 27 April to 30 September 2020 under the new Corporate Insolvency and Governance Act.

It is clear that Q2 reflects an unprecedented situation and one which the government has sought to manage. It will certainly be interesting to see the statistics in Q3 and Q4 of 2020, particularly when the protections imposed by the government for companies are removed.

 

For more information or advice on this or any other insolvency-related issue, you can contact Head of Insolvency and qualified Insolvency Practitioner, Annabel Whittaker on 0115 9 100 256 or send her an email.

Posted on August 19, 2020

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