Q1 sees compulsory liquidations rise
Insolvency statistics from quarter one highlight a sharp increase in compulsory liquidations, a 53.1 per cent jump on the last quarter and a 10.2 per cent year on year rise.03 May 2014
This large increase compared to the previous quarter appears to be attributed to an unusually low number of compulsory liquidations in October to December 2013. The data for January to March 2014 is consistent with otherwise fairly stable figures seen since 2012.
The most recent figures have also shown that corporate insolvencies have increased by 4.8 per cent in comparison to the previous quarter and an increase of 4.9 per cent has been shown in comparison to the same quarter in 2013.
The number of creditors’ voluntary liquidations was down 7.1 per cent on the previous quarter but up 2.9 per cent on the corresponding quarter of the previous year.
Traditionally the first quarter of the New Year sees personal insolvencies climb slightly. It is not unusual for people struggling with debts to put off dealing with their problems until the post-Christmas period.
Despite the slight decrease overall in personal insolvencies, we can see the numbers of Individual Voluntary Arrangements (IVAs) has increased compared to the same quarter in 2013.
IVA’s in recent months have shown that people are struggling with the cost of living, this has been highlighted by the amount of disposable income clients have to make payments towards their debts.
Personal finances are still under pressure with wages slowly increasing the effects of this will not be immediate. It is also important to note that the official statistics do not tell the full story about insolvency in England & Wales. Debt Management Plans (DMPs) have increased significantly in size in recent years, however the number of people in DMPs remains unknown.
Even though the first quarter results shows there has been a slight increase in Bankruptcies, they are still considerably lower than they were this time last year. Court fees associated with bankruptcy went up earlier this month, which may now lead people towards the informal insolvency route instead.