The Insolvency Service insolvency statistics for the third quarter of 2009 (July to September) make grim reading for both corporate and personal insolvencies.
Although the number of corporate insolvencies at 6,294 represented a decrease of 7.2% on the previous quarter it is an increase of 11% compared to the third quarter of 2008 and corporate insolvencies remain at a ten year high. Within the corporate statistics it is notable that company voluntary arrangements increased by 16.2% and receiverships increased by 50.9% compared to the same quarter in 2008 while administrations fell by 3.3% on the same basis. This may be an illustration of distressed property values being addressed by receivers appointed by lenders and creditors concerns regarding “pre-pack” administrations causing renewed interest in company voluntary arrangements.
There were 35,242 personal insolvencies during the quarter, an increase overall of 28.2%. There were increases in both bankruptcies and individual voluntary arrangements along with an increasing take up of Debt Relief Orders following their introduction in April 2009.
The statistics are reflected in our experience at Turpin Barker Armstrong. We are seeing an increase in corporate insolvencies, mainly as creditors’ voluntary liquidations and substantially more enquiries for individual voluntary arrangements. Many individual voluntary arrangement enquiries are from individuals with excessive credit but we are seeing an increase in enquiries from the self-employed. We find that an individual voluntary arrangement may be used to protect a business and avoid the need for the business to be sold or closed and the individual concerned to seek employment. For this reason we like to be in contact with potential clients as soon as they start to experience difficulty and are happy to meet with charge or obligation to encourage advice to be sought at an early stage while options are still available.
Date:26 January 2010
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