Q4 2013 Insolvency Statistics – Harrington Brooks No.1 Provider.

Statistics showing insolvencies in the fourth quarter of 2013 were published on 7 February 2014 by the Insolvency Service. Despite the fall in individual insolvencies, Harrington Brooks did 2641 IVAs in the last quarter of 2013, representing over 20% of all IVAs – more than any other insolvency provider.

Harrington Brooks aim to provide a holistic service for customers and as such offer a number of different specialist services in this sector under the trading names of Castle Keep Law, One Advice and Ask Finance. This means we are able to ensure the financial solutions we provide are the best option for those struggling with debt.

David Rankin, insolvency practitioner at Harrington Brooks, commented:

David Rankin
David Rankin. One of Harrington Brooks’ Insolvency Practitioners

“These official statistics include Bankruptcy Orders, Debt Relief Orders and Individual Voluntary Arrangements but do not include Debt Management Plans and for this reason the official statistics are an unreliable guide to the overall levels of personal insolvency in England and Wales. Until and unless the government finds a way to monitor new DMPs, the true scale of personal insolvency in England & Wales will remain hidden.

Typically many people try to stave off insolvency in the run-up to Christmas and we often see an increase in people seeking a solution to their debt problems in the first quarter of the year. There are also signs that creditors may be becoming more flexible when considering IVAs so it will be interesting to see how these trends continue in the first quarter of 2014.”

Here’s an overview of the findings published by the Insolvency Service:

1. Individual Insolvencies

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  • There were 24,282 individual insolvencies in England and Wales in the fourth quarter of 2013. This was a decrease of 4.6% on the same period in 2012.
  • This was made up of: 5,386 bankruptcies,
  • 6,563 Debt Relief Orders (DROs) (down 13.1% over the 2641 12,333 Individual Voluntary Arrangements (IVAs)
  • Of these statistics the only increasing category was the level of IVA’s, up 12.3% over the same period. All other categories were down on the previous quarter and on the previous year.
  • Bankruptcy numbers have been impacted by the introduction of DROs from April
  • 2009, amongst other factors. The number of DROs has been higher than total bankruptcies for six consecutive quarters, while Bankruptcy Orders have been lower than IVAs for the last 11 quarters.
  • IVAs now make up more than half (51%) of all individual insolvencies.
  • There were 101,049 individual insolvencies in the calendar year 2013 in England and Wales, a decrease of 7.9% from 2012. Breakdown:
    –24% bankruptcies (down 22.8% on 2012),
    –27% Debt Relief Orders (down 11.7% on 2012)
    –48% Individual Voluntary Arrangements (IVAs) (up 4.9% on 2012).
  • This is the first year in which the number of DROs has been higher than total bankruptcies and the third year where the number of bankruptcies has been lower than IVAs.

Company Liquidation And Individual Insolvency Rates: Longer-Term Perspective

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  • Last year, 1 in 166 active companies (or 0.6% of all active registered companies) went into liquidation. This was down from 1 in 159 in the 12 months, and 1 in 144 in the calendar year 2012.
  • The liquidation rate remains low compared to the average of 1.2% seen over the last 25 years. It should be noted that the number of active companies has changed considerably over this period: there were 2.7 million active registered companies in Q4 2013; this compares with only about 900,000 in the early 1990s and fewer than 800,000 in 1986.
  • In the calendar year 2013, 1 in 445 adults (or less than 0.25% of the adult population) became insolvent. This is down from 1 in 439 in the twelve months ending Q3 2013, and 1 in 406 in the calendar year 2012.
  • Individual insolvency rate is currently above the annual average of around 1 in 1,400 adults (0.1%) seen over the last 25 years.
  • Total Personal Insolvencies in England & Wales in the fourth quarter of 2013 were down by 4.6% when compared to the same period in 2012 and figures for the whole year show a decrease of 7.9%. Within these figures however the number of Individual Voluntary Arrangements in the fourth quarter has risen by 12.3% when compared with the same period of 2012 and by 4.9% for the year as a whole.
  • There were a total of 101,049 personal insolvencies in 2013 making it the 8th year in a row where the total number has exceeded 100,000. There were 48,967 IVAs.

References:
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The United Kingdom Statistics Authority has designated these statistics as National Statistics, in accordance with the Statistics and Registration Service Act 2007 and signifying compliance with the Code of Practice for Official Statistics.
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The Insolvency Service exists to provide the framework and the means for dealing with financial failure in the economy and with the misconduct that is often associated with it. To achieve this we will maintain and develop a world-class insolvency law and regulatory framework; deliver key public services to support that framework; deliver and promote effective investigation and enforcement regime; and ensure an organisation devoted to continuous improvement.