Business insolvencies fell nearly 7% in the second quarter of 2014 but personal bankruptcies rose significantly, latest figures from the Insolvency Service have revealed.
The Q2 2014 there were 3,461 company liquidations, a drop of 6.9% from Q1 2014 and a 15.1% fall compared to Q2 2013.
There were 2,487 creditors’ voluntary liquidations in Q2 2014, down by nearly a fifth (18.1%) compared to the same quarter last year.
More than 970 businesses went into compulsory liquidation in Q2 2014, a 9.4% drop on the last quarter.
Other key business figures:
- 1 in 177 companies went into liquidation between June 2013 and June 2014
- 410 companies went into administration, a drop of 19.2% compared to Q1 2013
- there were 171 receiverships, a 16.6% fall on the last quarter.
The figures also reveal there were 27,029 individual insolvencies in the second quarter of 2014, a 5.1% increase on the same period a year ago.
The rise comes despite a 15.9% drop in the number of personal bankruptcies and a 1.8% decline in debt relief orders.
The sharp increase has been attributed to the use of IVAs (individual voluntary arrangements, legally-binding agreements ensuring monthly repayments to creditors – usually lasting 5/6 years), which rose by more than a fifth (20.3%) in Q2 2014.
Graham Horne, deputy chief executive of the Insolvency Service, said:
“Today’s figures show that more people have become insolvent than last year. There are a number of ways to manage debts over time, and it is important that people who need help should seek early advice. The government-backed Money Advice Service has information on available advice.
“More than half the people entering formal insolvency are now using IVAs to deal with their debts compared with other forms of personal insolvencies. Over the last year, there was a 20% increase in IVAs while bankruptcies and debt relief orders decreased. Company liquidations decreased over the last three months, reflecting a similar trend over the last year.”
