Insolvency figures for England, Wales and Scotland were broadly unchanged in 2016 compared to the year previous, the Insolvency Service has revealed.
The Government body’s latest annual report looks at data on company liquidations, administrations, and turnarounds, as well as individual insolvencies.
The statistics show that the gross number of company insolvencies was in fact higher in 2016, primarily caused by 1,796 connected personal services companies entering liquidation on the same date following changes to claimable expenses rules.
Omitting these, the underlying number of company insolvencies remained static.
In terms of personal insolvencies, which include individuals who have failed to repay debt, the figure stood at its lowest level in 11 years.
An increase in individual voluntary arrangements (IVAs), an alternative to bankruptcy where a binding arrangement is agreed with creditors, pushed up overall number slightly, the report said.
Personal bankruptcies fell in 2016, while debt relief orders rose due to a change to eligibility criteria.
Commenting on the statistics, Insolvency Service chief executive Sarah Albon said: “The underlying trend for company insolvencies was static in 2016. The overall increase for the full year is attributable to a one-off liquidation of a large number of personal service companies following the closure of tax loophole making them unviable.
“Personal insolvencies increased last year for the first time since 2010, however the total was still the second lowest number in the last 11 years. It is very distressing to live with unsustainable personal debt so it is important for people to seek advice.”
Our knowledge of insolvency law is second-to-none. With personal experience representing creditors of Lehman Brothers during the financial crisis, as well as regularly assisting individuals and businesses to achieve the best possible outcome in the event of bankruptcy, we are well placed to find the right solution for you. Contact us for more information on the legal services we offer.
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