Insolvency News – 4th Quarter 10


COMPANY INSOLVENCIES

There were 3,955 compulsory liquidations and creditors’ voluntary liquidations in total in England and Wales in the fourth quarter of 2010 (on a seasonally adjusted basis).  This was a decrease of 0.2% on the previous quarter and a decrease of 11.3% on the same period a year ago.

This was made up of 1,200 compulsory liquidations (which are up 5.8% on the previous quarter but down 9.9% on the corresponding quarter of the previous year), and 2,755 creditors’ voluntary liquidations (which are down 2.6% on the previous quarter but down 11.8% on the corresponding quarter of the previous year). 

Table I. Company Liquidations in England and Wales (seasonally adjusted) 1
   

 

 

 

 

 

% change – Q4 2010 on

   

2009 Q4

2010 Q1 r

2010 Q2 r

2010 Q3 r

2010 Q4 p

Q4 2009

Q3 2010

Company Liquidations

4,457

4,051

4,074

3,964

3,955

-11.3

-0.2

of which: Compulsory

1,331

1,295

1,164

1,134

1,200

-9.9

5.8

 

Creditors’ Voluntary2

3,126

2,757

2,911

2,830

2,755

-11.8

-2.6

Source: Insolvency Service and Companies House
p = provisional, r = revised
1 Longer series back to 2001 are presented in the accompanying detailed tables.
2 Where the creditors’ voluntary liquidation is the first insolvency procedure entered into (see Notes to Editors).

 

Additionally, there were 1,114 other corporate insolvencies in the fourth quarter of 2010 (not seasonally adjusted) comprising 302 receiverships, 642 administrations and 170 company voluntary arrangements. In total these represented a decrease of 24.0% on the same period a year ago.  Within this, administrations were down 24.4%.

Table II. Other Corporate Insolvencies in England and Wales (not seasonally adjusted) 1
   

 

 

 

 

 

% change – Q4 2010 on

   

2009 Q4

2010 Q1

2010 Q2

2010 Q3

2010 Q4 p

Q4 2009

Receiverships2

397

356

302

349

302

-23.9

Administrations3

849

783

777

633

642

-24.4

Company voluntary arrangements

219

204

232

159

170

-22.4

Source: Companies House
p = provisional,
1 Longer series back to 2001 are presented in the accompanying detailed tables.
2 Includes Law of Property Act receivers (see “Notes to Editors” paragraph 9).

3
Includes Administrator Appointments.

 

Note: The figures in Table II are not seasonally adjusted and are not, therefore, on the same basis as the headline figures in Table I.  The accompanying detailed tables also include the non-seasonally adjusted series for corporate liquidations.


 

INDIVIDUAL INSOLVENCIES (not seasonally adjusted)

There were 30,729 individual insolvencies in England and Wales in the fourth quarter of 2010. This was a decrease of 13.6% on the same period a year ago.

This was made up of 12,049 bankruptcies (which were down 29.2% on the corresponding quarter of the previous year), 12,508 Individual Voluntary Arrangements (IVAs), (which were down 5.4% on the corresponding quarter of the previous year) and 6,172 Debt Relief Orders (DROs), (which were up 15.4% on the corresponding quarter of the previous year) (see ‘Notes to Editors’ paragraph 12).

In the fourth quarter of 2010, 85.4% of bankruptcies were made on the petition of the debtor, broadly comparable to the levels for recent quarters.  The percentage of bankruptcy orders involving trading debts (self-employed bankruptcies) was 11.9% in the third quarter of 2010 (fourth quarter 2010 figures for trading-related bankruptcies are not yet available), a little lower than the levels seen throughout 2009 and the first half of 2010.

 

Table III. Individual Insolvencies in England and Wales (not seasonally adjusted) 1
   

 

 

 

 

 

% change – Q4 2010 on

   

2009 Q4

2010 Q1

2010 Q2

2010 Q3

2010 Q4 p

Q4 2009

Total Individuals

35,574

35,682

34,743

33,935

30,729

-13.6

Bankruptcy Orders

17,007

18,256

14,982

13,907

12,049

-29.2

Debt Relief Orders

5,348

5,644

6,295

7,068

6,172

15.4

Individual Voluntary Arrangements

13,219

11,782

13,466

12,960

12,508

-5.4

Source: Insolvency Service
p = provisional

1
Longer series back to 2001 are presented in the accompanying detailed tables, as are seasonally adjusted figures for individual voluntary arrangements (and for bankruptcy orders up to Q1 2009 only)

 

 

STATISTICS RELEASE: 2010 SUMMARY, ENGLAND AND WALES

COMPANY INSOLVENCIES

There were 16,045 compulsory liquidations and creditors’ voluntary liquidations in total in 2010 – a decrease of 15.9% on 2009.

This was made up of 4,792 compulsory liquidations (which are down 15.1% on 2009), and 11,253 creditors’ voluntary liquidations (which are down 16.2% on 2009).

In 2010 there were also 4,909 other corporate insolvencies, comprising 1,309 receiverships, 2,835 administrations and 765 company voluntary arrangements.  In total these represented a decrease of 22.8% on 2009.


 

INDIVIDUAL INSOLVENCIES

There were 135,089 individual insolvencies in England and Wales in 2010, an increase of 0.7% from 2009.  This included 59,194 bankruptcies (which were down 20.7% on 2009), 50,716 Individual Voluntary Arrangements (IVAs), (which were up 6.5% on 2009) and 25,179 Debt Relief Orders (DROs).

The Debt Relief Order is an individual insolvency procedure which came into force on 6 April 2009 and which provides an alternative route into personal insolvency for certain categories of over-indebted individuals, subject to some restrictions. Additional details are provided under the “Notes to Editors”, paragraph 12 and on the Insolvency Service website. Some of those who had a DRO approved would have been declared bankrupt had the DRO route not been an option, but it is not possible to quantify this proportion.

Figure 4 shows how the numbers of insolvencies have changed since 1987 (when the first IVAs were registered).  

In 2010, 85.6% of bankruptcies were made on the petition of the debtor, comparable to the level in 2009.  For bankruptcy orders there has been a pronounced shift towards debtor’s petition bankruptcies and away from creditor’s petitions in recent years.

 


COMPANY LIQUIDATION AND INDIVIDUAL INSOLVENCY RATES: LONGER-TERM PERSPECTIVE

In the twelve months ending Q4 2010, approximately 1 in 138 active companies (or 0.7% of all active registered companies) went into liquidation, which is a slight decrease from the previous quarter, when this figure stood at 1 in 133.  As Figure 3 shows, the liquidation rate remains low compared to a peak of 2.6% in 1993, and the average of 1.3% seen over the last 25 years.  It should be noted that the number of active companies has changed considerably over this period; there were 2.3 million active registered companies in Q4 2010; this compares with only about 900,000 in the early 1990s and less than 800,000 in 1986.

In the twelve months ending Q4 2010, approximately 1 in 323 people became insolvent.  This is down from 1 in 311 in the previous quarter. The individual insolvency rate has displayed a steeply upward path (with some fluctuations) since 2004 and is currently elevated compared to the annual average of 1 in 1800 (0.1%) people seen over the last 25 years.

 

 

INSOLVENCIES IN SCOTLAND AND NORTHERN IRELAND

The following tables present recent trends in insolvencies in Scotland and Northern Ireland, complementing those for England and Wales above (longer series back to 2001 are presented in the accompanying detailed tables).

Table IV. Insolvencies in Scotland (not seasonally adjusted)  

 

 

 

 

 

 

 

% change – Q4 2010 on

 

 

 

2009 Q4

2010 Q1

2010 Q2

2010 Q3

2010 Q4 p

Q4 2009

Company Liquidations1

154

275

297

224

245

59.1

 

of which:

Compulsory

106

202

215

154

164

54.7

 

 

Creditors’ Voluntary2

48

73

82

70

81

68.8

 
Individuals3, 4

5,693

5,200

5,378 p

5,168 p

4,583

-19.5

 

of which:

Sequestrations4

3,365

3,167

3,139 p

3,092 p

2,493

-25.9

 

 

(of which: LILA)

(1,990)

(1,905)

(1,897) p

(1,631) p

(1,368)

(-31.3)

 

 

Protected Trust Deeds

2,328

2,033

2,239 p

2,076 p

2,090

-10.2

 
p = provisional
1
Source: Companies House
2
Including those companies which had previously been in administration or other insolvency procedure
3
Source: Accountant in Bankruptcy (AiB). Latest Release:
AiB Quarterly Statistics – Q3 2010/11
4
The sequestration figures include LILA (Low Income, Low Assets) cases.  These were introduced as a new route into bankruptcy under the Bankruptcy and Diligence etc (Scotland) Act 2007, wef 1 April 2008.
 
 

 

 

Table V. Insolvencies in Northern Ireland (not seasonally adjusted)

 

 

 

 

 

 

 

% change – Q4 2010 on

 

 

2009 Q4

2010 Q1

2010 Q2

2010 Q3

2010 Q4 p

Q4 2009

Company Liquidations

74

102

116

79

85

14.9

of which:

Compulsory1

57

49

92

55

54

-5.3

 

Creditors’ Voluntary2

17

53

24

24

31

82.4

Individuals1

573

554

636

551

582

1.6

of which:

Bankruptcies

381

316

363

290

352

-7.6

 

IVAs

192

238

273

261

230

19.8

p = provisional
1
Source: Department for Enterprise, Trade and Investment, Northern Ireland (DETINI)
2
Source: Companies House