Posted on 22 August 2016
According to a recent report by The Insolvency Service, the annual insolvency rates per 10,000 adults have dropped to their lowest level since 2005. The rates reached an all-time high in 2009, at the tail end of the recession but have been steadily falling since. In 2014 the rates stood at 21.8 per 10,000 adults to 17.6 in 2015, a decrease of 4.2. This trend has been mirrored on a regional basis.
The bankruptcy rate has also fallen over the past year, alongside reductions in the Debt Relief Orders (DRO) and Individual Voluntary Arrangements (IVA). Interestingly the insolvency rates for females was higher than males, primarily due to the fact that females had more DRO’s approved.
At a regional level the East Midlands marked the highest decrease in insolvencies since 2000 at 17.9 per 10,000 adults, with London showing the smallest at 7.8. However, for 2015 alone London had the lowest total Insolvency Rate, whilst the North East had the highest.
Some of the changes to the statistics may be due to a change in the bankruptcy and DRO criteria in October 2015. Future statistics may be affected also due to the changes in the method of filing bankruptcy claims brought into effect in April 2016.
There are numerous potential reasons behind the fall in insolvency rates. The economy is now in a stronger position than it was in 2005, meaning business confidence is higher and companies are more able to ‘weather the storm’. There has also been a move by insolvency practitioners to find alternatives to filing for insolvency, such as restructuring or alternative finance.
Smith Cooper understand that time is of the essence with debt matters and the sooner we are able to understand the problems you face, the more likely we are to be able to provide options and acceptable solutions for all parties, including main stakeholders and your creditors. We often seek to employ an innovative approach to ensure a positive outcome where possible.
We appreciate that at times like these, the demands on your finances are high and cash is not readily available. For that reason, your initial meeting with one of our insolvency specialists will take place free of charge. At this point, we will determine your financial position and discuss the best strategic options for you to adopt at this most sensitive and pressured time.
Should you have any concerns you wish to discuss with one of our experienced Business Recovery and Insolvency Team please contact us via www.smithcooper.co.uk/services/business-recovery-and-insolvency.