Monthly insolvency statistics – November 2022

Corporate Insolvencies

England and Wales

Total corporate insolvencies in November 2022 were 2,029.  This is 21% greater than November 2021 and importantly 35% higher than November 2019 (pre COVID Pandemic). 

Creditors Voluntary Liquidations (“CVLs”) totalled 1,595 and were 5% higher than November 2021 and 50% higher than in (pre-Pandemic) November 2019.

Compulsory Liquidations (“WUCs”) were 290 which is more than 5 times higher than November 2021 and importantly 7% higher November 2019.

Administrations totalled 134 which is 44% higher than in November 2021 but 11% lower than pre Pandemic levels.  

CVAs (10) remain at low levels in November 2022, the same as November 2021 but more than 50% lower than November 2019. 

Scotland

In November 2022 there were 118 company insolvencies registered in Scotland, 13% higher than November 2021 and 36% greater than November 2019. 42 compulsory liquidations, 72 CVLs, 3 administrations and one CVA. There were no receivership appointments.

Northern Ireland

In November 2022 there were 20 company insolvencies registered in Northern Ireland, more than double November 2021 but 35% lower than November 2019. This is comprised of 16 CVLs, 2 compulsory liquidations and 2 CVAs. There were no administrations or receiverships.

Personal Insolvencies

England and Wales

Personal insolvency numbers continue to remain flat and show no real signs of increasing in the short term, but this cannot be sustained for an indefinite period. With fuel and energy prices still volatile and the cost-of-living crisis taking effect, personal insolvencies are almost certain to rise in the coming months and show a more marked increase in the first and second quarter of 2023.

It is interesting to see a distinction starting to develop between the frequency of use of the different personal insolvency solutions available to address problems of indebtedness.

For example, we can see that Breathing Space (BS) applications have hovered around 5,400 per month since inception, and November saw another upturn in 6,796 applications being made – the highest monthly number since inception in May 2021.

107 Mental Health BS applications were made in November, against a similar monthly average, and 6,689 Standard BS applications were made, against a 12-month average of 5,754.

Those using BS, may well be people with more pressing and immediate debts that elicit creditor pressure quickly.

There has been an approximate average of 7,600 Individual Voluntary Arrangements (IVA’s) in the 6-month period to October 2022 and then 7,650 recorded in November. IVA’s have fluctuated between around 6,300 and 7,800 per month for some time, with some minor peaks.

Following the changes in criteria from June 2021, allowing easier entry into a Debt Relief Order (DRO), they have averaged 1,995 per month, with the November figure of 2,269 representing a marked increase.

A “new” DRO would have previously likely have been a bankruptcy and therefore, the DRO and bankruptcy graphs travelling in diverging directions is no real surprise. In November, there were only 546 bankruptcies, against a 12-month average of 566.

Bankruptcies are at historical lows and the reduction in debtors making their own bankruptcy application in November (445 against a 12-month average of 476) is a result of those who are now eligible to choose a DRO instead.

Bankruptcy petitions will undoubtedly have to be issued by creditors to recover debts incurred during the pandemic and as a result of current economic pressures. We do expect to see creditor-driven bankruptcies begin to increase early in 2023. In November there were 101 creditors’ petitions, which is slightly up on the 12-month average of 94. The summer recess of the Courts, who are already experiencing significant backlogs, could explain the delay in the upturn in creditor petitions, which is now slowly starting to creep upwards following the covid stagnation.

One noticeable element to the creditor petition statistics is that HMRC have now crept to the top of the table of volume bankruptcy petitioners, which reflects the government’s intentions in relation to recovery of unpaid tax. Although corporate entities, who are engaging with HMRC, appear to be obtaining generous time to pay arrangements, individuals who are not engaging, appear to be facing no-nonsense enforcement

Northern Ireland

In November 2022 there were 146 individual insolvencies in Northern Ireland, 24% lower than in November 2021, and 48% lower than November 2019. This consisted of 134 IVAs, nine DROs and three bankruptcies.