Phil MeekinView Profile
Latest statistics released by the Insolvency Service show a fall of some 18% in the number of companies entering creditors’ voluntary liquidations (CVL) compared to Q2 in 2013, and the lowest since 2008.
As our economy continues to prosper and economic indicators show favourable trends – steady growth in GDP, reducing unemployment, inflation under control, it comes as no surprise to learn that overall corporate insolvency statistics in England and Wales for Q2 2014 show significantly reduced levels of activity.
Latest statistics released by the Insolvency Service show a fall of some 18% in the number of companies entering creditors’ voluntary liquidations (CVL) compared to Q2 in 2013, and the lowest since 2008. The number of companies entering administration in Q2 tumbled by almost 35% compared to the same period a year earlier. This was the lowest quarterly figure since Q1 2005.
By comparison, individual insolvencies actually showed a sharp rise in the last quarter compared to 2013, with an increase of over 20% in the number of individual voluntary arrangements (IVA) – the highest level since the scheme was introduced in 1987. Bankruptcies and debt relief orders (DRO) continued to decrease at a fairly steady rate.
So what has caused this increase in IVAs? Is it that people are becoming better educated and more aware of alternatives to bankruptcy? One of the difficulties of interpreting individual insolvency statistics is the fact the waters are muddied by debt management plans (DMP). These informal arrangements do not have to be recorded and as such no accurate statistics are available. Without this information it is impossible to see a complete picture of personal insolvency. Pay Day Loans could also be responsible for camouflaging insolvency (or at least postponing the inevitable).