Earlier this morning (Wednesday 17 May) the Insolvency Service published its monthly insolvency statistics for April on both company and individual insolvencies. Interestingly, and a little at odds with the stressed looks NTI's clients have been wearing well over past six weeks, the data shows that there were 1,685 company insolvencies registered, which is 15 per cent lower than the same month last year (which was 1,988), but higher than the number registered pre-pandemic - was that really more than three years ago now? For individual insolvencies, 531 Bankruptcies were registered, which was 5 per cent lower than in April 2022, but less than half of pre-2020 levels.
Digging into the detail, there were 183 Compulsory Liquidations in April 2023, which - if it seems like a lot, it was ... as it was - almost double the number in April 2022. The increase in winding-ups by the court appears to be partly as a result of an increase in winding-up petitions presented by HMRC.
The flag carrier for corporate insolvencies is Creditors' Voluntary Liquidations, but these were a surprising 23 per cent lower in April at 1,368.
Taking the lead at the front were Administrations and Company Voluntary Arrangements, which were higher in April 2023 than the previous year. There were 12 CVAs (which is 20 per cent higher than April 2022) and 122 Administrations; a jump of 8 per cent on April 2022. There were no Receivership appointments, which we hope is a good portent for a total absence of questions about the topic in the CPI exam to be sat by our students on 2 June.
Moving onto personal insolvency, there were 2,384 Debt Relief Orders in April 2023, which was 24 per cent higher than in the same month last year - these may be volatile due to the introduction of new DRO 'hubs'. The Citizens Advice DRO hub is home to a team of skilled and experienced Debt Relief Order specialists. The DRO hub process applications with an average turnaround time of 47 days - with the quickest being just one day. Initially there were to be many regional hubs, but there are just two. For most clients the hubs will get them to a DRO quicker and more efficiently, and it is hoped that advisers will view them as a valuable option, especially where their own capacity is limited.
On average, 6,336 Individual Voluntary Arrangements were registered per month in the three-month period ending April 2023, which is 16 per cent lower than the three-month period ending April 2022.
