Monthly insolvency statistics – December 2021

Corporate insolvencies

England and Wales

Total corporate insolvencies decreased by 11% this month to 1,486 however this total is 20% higher than December 2020 and 33% higher than December 2019 (pre-pandemic). This was driven by a 22% increase in Creditors Voluntary Liquidations (“CVLs”) which totalled 1,365.

CVLs were 73% higher than they were pre-Pandemic in December 2019 which could mark a sudden upswing in an otherwise statistically quieter month. CVLs were 37% higher than they were in December 2020. Compulsory Liquidations (“WUCs”) (42) continue to be significantly lower than they were pre-Pandemic, 75% when compared to December 2019, and 2% lower when compared to December 2020. The continued governmental reliefs and changes to the petitioning process is likely to be the cause of the continued lower levels of court orders.

Administrations were at lower levels than previous December's at 72 which is 52% lower in December 2020 and 49% lower than December 2019. CVAs remain low with only 7 registered in December 2021, more than 60% lower than prior years and potentially an ongoing sign of the continued uncertainty for business in being able to accurately forecast the future trading performance.

Scotland

In December 2021 there were 93 company insolvencies registered in Scotland, 63% more than in December 2020 and 4% higher than in December 2019. This was comprised of 17 compulsory liquidations, 73 CVLs and 3 administrations. There were no CVAs or receivership appointments. Historically, the volume of company insolvencies registered in Scotland has been driven by compulsory liquidations. However, since April 2020, there have been more than twice as many CVLs as compulsory liquidations.

Northern Ireland

In December 2021 there were 9 company insolvencies registered in Northern Ireland, the same as December 2020 but 72% lower than December 2019. This is comprised of 1 administration, 7 compulsory liquidations and 1 CVA. There were no CVL or receivership appointments.

Personal Insolvencies

England and Wales

The personal insolvency statistics for December 2021 reveal that there were only 434 bankruptcy orders made in the month, 47% lower than December 2020 and 60% lower than December 2019. 

The 1,872 Debt Relief Orders (DROs) in December 2021 were 51% higher than December 2020 but remained 10% lower than pre-pandemic 2019 levels.

In 2021, there were an average of around 1,400 DROs per month before the criteria were widened, and an average of 1,859 per month after the changes.

As we have stated previously, this increase is largely a result of those “bankruptcies” which have now become eligible to be a DRO.

The monthly trend of around 7,000 Individual Voluntary Arrangements (IVAs) being registered dipped slightly (6,648). This month’s IVAs are 16% lower than December 2020 and 15% higher than December 2019 but the overall trend remains flat.

Breathing Space

Since the launch of the Breathing Space (BS) legislation, there have been 41,127 registrations, with 40,503 Standard BS and 624 Mental Health BS registrations.

December saw the lowest number of BS registrations since the launch, with only 4,092 Standard BS schemes entered, but 104 Mental Health registrations were up on previous averages.

These very low numbers are mainly driven by a significant reduction in bankruptcies and DRO’s.

This will be the norm for a few months yet, with forbearance from creditors, many of who will have introduced their own policies during the pandemic, and the general lack of pressure on the indebted to take the next step into one of these formal procedures.

Although the general mood is that the above scenario is unsustainable, it is likely that the fallout will be slow and the numbers will likely creep up month on month, rather than demonstrating any significant increases over a short period.

In the summer, many were predicting the turn of the year as the point at which personal insolvency numbers would noticeably increase, but a safer bet might well be the late spring and summer of 2022.

Northern Ireland

In December 2021 there were 81 individual insolvencies in Northern Ireland, 48% lower than in December 2020, and 42% lower than December 2019. This consisted of 63 IVAs, 11 DROs and seven bankruptcies.

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