R3 responds to Q3 2021 insolvency statistics


Member article

  • There were 3,765 seasonally adjusted business bankruptcies in the third quarter of 2021, an increase of 16.7% from the second quarter of 2021 figures of 3,226 and an increase of 43.5% from the third quarter of 2020 ( 2,624).
  • There were 26,758 seasonally adjusted individual bankruptcies in the third quarter of 2021, a decrease of 1.8% from the second quarter 2021 figures of 27,252 and an increase of 32.5% from the third quarter of 2020 (20,194).

Eleanor Temple, President of the R3 Insolvency and Restructuring Professional Body in Yorkshire and a lawyer at Kings Chambers in Leeds, comments on the release of the third quarter 2021 insolvency statistics for England and Wales:

“The economic damage caused by the pandemic is now starting to be reflected in the levels of corporate insolvency – but the picture is mixed when looking at the different types of proceedings.

“Corporate insolvencies rose this quarter to the highest quarterly figure since the start of the pandemic, and this is due to an increase in voluntary liquidations of creditors – the highest quarterly total in 12 years.

“That said, administrations have remained static compared to Q2, while there has been a small decrease in the number of CVA; both being much lower than the previous year.

“The increase in CVLs would suggest that business leaders are choosing to shut down their businesses after negotiating for more than a year and a half during a pandemic and deem future success unlikely.

“It’s understandable given the current economic climate. Over the past three months, companies have faced a perfect storm of rising energy prices, labor market and supply chain issues. supply, coupled with the reduction and withdrawal of government support measures.

“On top of that, spending and consumer confidence declined in late summer and early fall as people worried about their finances and the future of the economy, and as a result , they reduced their expenses.

“As we move into the winter months, admins need to be alert to signs that their business could be in trouble, including cash flow issues, staff or vendor payment issues, and growing inventory levels – and seek advice as soon as one of them shows up, or if they are worried about their business and finances. The initial consultations with most insolvency professionals to identify collection options are free.

Personal bankruptcies are falling; Tellers increase

“The quarterly reduction in personal insolvencies is due to a decrease in individual voluntary arrangements and bankruptcies. However, personal insolvency levels are significantly higher than a year ago, and this is due to the number of debt relief orders which reached the highest quarterly total since the start of the pandemic. , which suggests that more people are looking for help managing their debts.

“The three months have been tough for consumers and for personal finances. While government initiatives like the leave plan have helped a lot of people, they haven’t been able to help everyone.

“And while the pandemic has enabled a number of people to save or pay off their debts, there are others who have had to borrow or use their savings to pay their bills, and those with low incomes have been hardest hit financially. .

“Our message to anyone worried about their finances is simple: seek advice. We know how hard it is to talk about your money worries, but having that conversation before your problems get worse gives you more potential solutions and more time to decide which one is best for you. .

This was posted in the Member News section of Bdaily by Melanie Rice.

Source link


About Author

Leave A Reply