Insolvency News – 2nd Quarter 09


COMPANY INSOLVENCIES

There were 5,055 compulsory liquidations and creditors’ voluntary liquidations in total in England and Wales in the second quarter of 2009 (on a seasonally adjusted basis). This was an increase of 2.9% on the previous quarter and an increase of 39.1% on the same period a year ago.

This was made up of 1,457 compulsory liquidations (which are down 6.8% on the previous quarter but up 8.7% on the corresponding quarter of the previous year), and 3,598 creditors voluntary liquidations (which are up 7.4% on the previous quarter and 56.8% on the corresponding quarter of the previous year).

In the twelve months ending Q2 2009, approximately 1 in 120 active companies (or 0.8%) went into liquidation, which is up slightly on the previous quarter when the figure was approximately 1 in 130.

Additionally, there were 1,529 other corporate insolvencies in the second quarter of 2009 (not seasonally adjusted) comprising 345 receiverships, 1,027 administrations and 157 company voluntary arrangements. In total these represented an increase of 22.7% on the same period a year ago.

INDIVIDUAL INSOLVENCIES (not seasonally adjusted – see ‘Notes to Editors’ paragraph 13)

There were 33,073 individual insolvencies in England and Wales in the second quarter of 2009. This was an increase of 27.4% on the same period a year ago.

This was made up of 18,870 bankruptcies (which were up 15.3% on the corresponding quarter of the previous year), 12,225 Individual Voluntary Arrangements (IVAs), (which were up 27.4% on the corresponding quarter of the previous year) and 1,978 Debt Relief Orders (DROs)

The Debt Relief Order is a new 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.

Some of those who had a DRO approved in Q2 2009 would have been declared bankrupt had the DRO route not been an option, but it is not possible to quantify this proportion.

In the second quarter of 2009, 86% of bankruptcies were made on the petition of the debtor, similar to the previous quarter and slightly higher than throughout 2007 and 2008 as a whole. The percentage of bankruptcy orders involving trading debts (self-employed bankruptcies) was 13.7% in the first quarter of 2009 (second quarter 2009 figures for trading-related bankruptcies are not yet available), which is an increase from 12.9% in the previous quarter.