Personal bankruptcies decline, business insolvencies rise
Big jump in business insolvencies
Business Insolvencies have continued to rise yet personal bankruptcy numbers have dropped, as shown in the latest figures from the Insolvency Service.
Whilst personal bankruptcies dropped in comparison to the same period for last year, it was not the same for businesses. Business Insolvencies have risen dramatically, mainly due to the ending of Business support through the pandemic.
The number of registered company insolvencies in May 2022 was 1,817. This was 79% higher than in the same month in the previous year (1,014 in May 2021), and 34% higher than the number registered three years previously (pre-pandemic; 1,352 in May 2019).
In May 2022 there were 1,584 Creditors’ Voluntary Liquidations (CVLs), 70% higher than in May 2021 and 66% higher than May 2019. Numbers for other types of company insolvencies, such as compulsory liquidations, remained lower than before the pandemic, although there were four times as many compulsory liquidations in May 2022 compared to May 2021, and the number of administrations was 95% higher than a year ago.
For individuals, 566 bankruptcies were registered, which was 23% lower than in May 2021 and 61% lower than May 2019.
There were 2,030 Debt Relief Orders (DROs) in May 2022, which was 33% higher than in May 2021 but 11% lower than the pre-pandemic comparison month (May 2019). The increase compared to last year is linked to changes to the eligibility criteria on 29 June 2021 including an increase in the level of debt at which people can apply for a DRO from £20,000 to £30,000. In the 11 months since the change in DRO eligibility criteria, an estimated 7,787 individuals have had a DRO approved who would not have previously been eligible.
There were, on average, 7,812 IVAs registered per month in the three-month period ending May 2022, which is 6% higher than the three-month period ending May 2021, and 10% higher than the three-month period ending May 2019. IVA numbers have ranged from around 6,300 to 7,800 per month over the past year.
