Commentary on Latest Insolvency Statistics 2020-2021

Creditors Voluntary Liquidations are up. Significantly higher than in 2020 and also at an historically high quarterly level

It’s been well documented that Government support over the last nearly two years has assisted businesses from falling into insolvency. Current figures show an increase in Creditors Voluntary Liquidations. What is less well documented is what happens next?

Creditors Voluntary Liquidations and Company Voluntary Arrangements are now both rising

The writing is on the wall with the latest insolvency statistics. It shows insolvent liquidations (Creditors Voluntary Liquidations) rising faster than at any time since the Covid-19 pandemic started. The Insolvency Service states:

“Registered company insolvencies increased in Q4 2021 to the highest quarterly level since Q3 2012, driven by an increase in CVLs.”

This is hardly surprising as Government support has now ceased and directors are having to decide whether to try and shore up an existing ailing business or, as in many cases, close the existing insolvent entity and start again.

Its also interesting to see Company Voluntary Arrangements (CVAs) increasing again. During the pandemic there was little appetite to strike a deal with creditors and make a proposal. As a result, CVAs fell. Now, more and more businesses are anticipating the end of restrictions imposed by Covid-19 and are more bullish about the future.

Now is the time to take advice from an Insolvency Practitioner

These two scenarios on first inspection may seem to be counter intuitive, but in fact they are just two extremes in the same picture. What is clear is that now is the time to take advice on your businesses’ future options if it is in financial difficulty.

Call our Insolvency Practitioners or send an enquiry now for a free initial consultation.

Also, K&W Recovery, trading as Antony Batty and Company, Thames Valley:

 

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