Personal Insolvencies increase for the 5th consecutive quarter
Figures published today by the Insolvency Service show that there have been an increase in the overall number of personal insolvencies for the 3rd quarter of 2016. The numbers of personal insolvency increased from 22,884 for the 2nd quarter of 2016 to 24,251 in the quarter ending September 2016.
September Quarter Personal Insolvencies
|
Type of Procedure |
2nd quarter 2016 | 3rd quarter 2016 |
Movement |
| Individual Voluntary Arrangement “IVA’s” |
12,550 |
13,917 |
10.9% ▲ |
| Bankruptcies |
3,594 |
3,844 |
7.0% ▲ |
| Debt Relief Orders “DRO’s” |
6,741 |
6,490 |
3.7% ▼ |
| Total Numbers |
22,884 |
24,251 |
6.0% ▲ |
Despite a slight reduction in the amount of Debt Relief Orders, the numbers of Bankruptcies and IVA’s have increased by 7.0% and 10.9% respectively. For Bankruptcy this may be due to streamlining of the Bankruptcy process in April 2016 and online applications being less daunting for debtor’s to undertake than attending court.
The continuing growth in the number of approved voluntary arrangements may be down to a number of factors. As previously noted in our June 2016 blog, a review was conducted by the FCA between June 2014 and May 2015 of both fee-charging and free-to-customer debt management firms. It was found that although many firms had made an effort to improve their practices, there was poor practice by some fee charging debt management companies and room for improvement by the free sector.
The exit from the industry which includes companies such as Personal Debt Helpline who had 16,000 customers has meant that many thousands of debt management customers have found themselves without a solution. Many of these customers should have been offered IVA’s and it would appear that they now have access to appropriate advice.
A number of unregulated lead generators have also appeared on the market, packaging IVA’s to Insolvency Practitioners after dubious advice for a fee. Bev Budsworth, Managing Director of The Debt Advisor Ltd adds, “I am seriously concerned about customers being “shoe horned” into IVA’s by unregulated lead generators. My advice to anyone with debt issues is make sure you only take advice from companies that are regulated by the FCA as they are the only organisations that can offer advice on all appropriate options”.
September Quarter Corporate Insolvencies
The insolvency number for company insolvencies has increased by around 2% on the June 2016 quarter as highlighted below.
|
Type of Procedure |
2nd quarter 2016 | 3rd quarter 2016 |
Movement |
| Compulsory Liquidations |
662 |
632 |
4.5% ▼ |
| Creditors Voluntary Liquidations “CVL’s” |
2,443 |
2,569 |
5.2% ▲ |
| Administrations |
340 |
352 |
3.5% ▲ |
| Company Voluntary Arrangements “CVA’s” |
108 |
75 |
30.6%▼ |
| Receiverships |
0 |
5 |
N/A ▲ |
| Total Numbers |
3,553 |
3,633 |
2.20%▲ |
The number of companies going into some form of insolvency has increased by 2.2% on the previous quarter. At 3,633 insolvencies for the September 2016 quarter this is roughly half of the numbers of businesses that were wound up in the final quarter of 2008.
The Debt Advisor Ltd incorporates The Business Debt Advisor (TBDA) which specialises in helping businesses struggling with debt issues. Laura Walshe head of TBDA adds, “We are seeing an increase in the number of enquiries from company directors. The reasons appear to be varied but do include loss of turnover caused by customers holding back on orders as a result of the uncertainty caused by Brexit.” Laura adds “Companies need to drive performance on a daily basis and maximise opportunities which arise as others dither.”
If you or your business is struggling with financial difficulties, feel free to give our teams a call.
| The Debt Advisor | 0800 0851 825 |
| The Business Debt Advisor | 0800 7810 990 |
There a range of solutions depending on whether you are salaried or self employed or you are a director or shareholder of a limited company. If you would like our team to call you, please use our contact form.
All debt solutions need to be carefully considered. IVA’s are formal solutions and failure to keep to the terms can result in your IVA failing and you could end up bankrupt.
There is also free debt help and advice available through a variety of debt charities. For more information, we recommend you visit www.moneyadviceservice.org.uk.
The Debt Advisor is Authorised and regulated by The Financial Conduct Authority (reg no: 606669).
