Monthly insolvency statistics – February 2022

Corporate Insolvencies

England and Wales

Total corporate insolvencies decreased by 3% this month to 1,515.  The overall trend of increased levels of insolvency continues in that this total is 13% higher than the pre-pandemic period February 2020.

The increase in insolvencies is primarily due to the continued rise in Creditors Voluntary Liquidations (“CVLs”) which totalled 1,329 and were over 125% higher when compared to February 2021 and 40% higher than in (pre-Pandemic) February 2020.

Compulsory Liquidations (“WUCs”) (74) continue to be significantly lower than they were pre-Pandemic, 68% lower when compared to February 2020 but 124% higher when compared to February 2021. Compulsory Liquidations, likely creditor driven, are again more than double the prior year.

Administrations totalled 109 which is 95% higher than in February 2021 but 26% lower than February 2020. CVAs (Company Voluntary Arrangements) remain at low levels with 3 registered in February 2022, 50% lower than February 2021 and 84% lower than February 2020.  

Scotland

In February 2022 there were 73 company insolvencies registered in Scotland, 181% higher than February 2021 but 15% lower than February 2020. 10 compulsory liquidations, 60 CVLs and 3 administrations. There were no CVAs or receivership appointments.

Northern Ireland

In February 2022 there were 18 company insolvencies registered in Northern Ireland, more than three times the levels of February 2021 but 33% lower than February 2020. This is comprised of 4 CVLs, 10 compulsory liquidations and 4 administrations. There were no CVAs or receiverships appointments.

Personal Insolvencies

England and Wales

Personal Insolvency numbers are maybe just starting to show some interesting trends as we move out of the pandemic.

There is much comparison to the numbers experienced against the impact of covid-19, which is flawed and produces misleading percentage swings against likely longer-term trends.

In February, Debt Relief Orders (DROs) climbed from a 2021 average of around 1,700 per month to a February figure of 2,242. The changes in criteria, allowing easier entry into a DRO from June 2021, are now starting to be reflected in the upturn in the monthly figures and this is a trend that should take the DRO figures back to pre-pandemic levels and beyond in the next few months.

A “new” DRO would have previously been a bankruptcy and therefore, the continued dip in bankruptcy numbers is no real surprise. In February, there were only 588 bankruptcies, against an average of around 800 per month during the pandemic. Bankruptcies are at historical lows and the decrease in debtors making their own application in February (around 600 opposed to pandemic levels of 700 per month) is a result of those who are now eligible to choose a DRO instead.

However, there is a queue of creditors waiting to issue bankruptcy petitions and these will be processed through the Court system over the coming months. We do expect to see creditor-driven bankruptcies begin to close the deficit in bankruptcy numbers generally created by those debtors choosing a DRO.

There were a total of 6,995 Individual Voluntary Arrangements (IVA) in February, which is around the normal monthly average for the last few years. IVA’s have fluctuated, but a flat line can be plotted through the peaks and troughs, which shows around 6,500 and 7,000 IVA’s registered per month.

Breathing Space

Since the launch of the Breathing Space (BS) legislation, there have been 46,407 registrations (averaging 5,156 per month), with 45,710 Standard BS and 697 Mental Health. BS registrations.

Breathing Space (BS) applications hovered around the 5,000 per month mark since inception in May 2021. February saw an upturn in the Standard BS figures to 5,705 applications and the 90 Mental Health BS applications were slightly up from the average around 80 per month. BS is still showing no signs of producing the predicted users, but it is providing a useful mechanism to pause and take stock, which is its very purpose.

Northern Ireland

In February 2022 there were 162 individual insolvencies in Northern Ireland, 13% higher than in February 2021, but 40% lower than February 2020. This consisted of 122 IVAs, 23 DROs and 17 bankruptcies.