2015 Q1 Insolvency Statistics – R3 comments
Commenting on the January-March, England & Wales insolvency statistics, R3 president Phillip Sykes says:
“Personal insolvencies are continuing to fall. These latest results mean that numbers are at their lowest level since 2005. Record low inflation will help relieve some pressure on those living at the edge of their means.”
“The upcoming changes to Debt Relief Orders could have helped bring down the number of people applying for a debtor petition bankruptcy: they might be trying to hold off before they can enter a Debt Relief Order under the more generous entry conditions to be introduced in October.”
“It is interesting to see the steep decline in Individual Voluntary Arrangements. It may be too early to draw conclusions but demand could be falling as a result of low interest rates, low inflation and tighter regulation. This trend is worth watching.
“The general corporate picture remains relatively stable, with a small fall in the number of corporate insolvencies this quarter. Insolvency numbers are back down at pre-crisis levels. Businesses are still benefitting from record low interest rates and, with inflation currently non-existent, will probably benefit from them for a while to come. Indeed, ‘non-flation’ will be helping businesses keep a lid on their outgoings as much as households.”
“There is more to the figures than meets the eye. Low interest rates are masking thousands of businesses that would still struggle if rates were closer to historic norms. Moreover, the insolvency figures don’t include thousands of businesses that are quietly removed from the Companies House register every quarter.”
“Although most of these are inactive businesses, there are others who avoid the formal insolvency process and scrutiny of a liquidator to close down without repaying money to taxpayers and other creditors.”