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Encouraging Insolvency Figures in England & Wales

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The number of corporate insolvencies in England and Wales have dropped to the lowest level since the last quarter of 2007 with 4,052 companies entering into formal insolvency in the first quarter of 2015, which is one per cent less than the last quarter of 2014 and 11 per cent lower than in the same quarter in 2014.

Creditors' voluntary liquidations are also at their lowest since the summer of 2008 with 2,481 companies entering into a creditor's voluntary liquidation 2015 Q1 - six per cent less than 2014 Q1.

Further, 904 companies were subject to a compulsory winding-up order in 2015 Q1, which represents a 16 per cent drop on 2014. Similarly 432 companies entered administration between January and March 2015 - 17 per cent lower than this period last year.

Commenting on the latest batch of corporate insolvency statistics in England and Wales, newly installed R3 President, Phillip Sykes stated:

"The general corporate picture remains relatively stable, with a small fall in the number of corporate insolvencies this quarter. Insolvency numbers are back down at pre-crisis levels. Businesses are still benefiting from record low interest rates and, with inflation currently non-existent, will probably benefit from them for a while to come. Indeed, 'non-flation' will be helping businesses keep a lid on their outgoings as much as households.

"There is more to the figures than meets the eye. Low interest rates are masking thousands of businesses that would still struggle if rates were closer to historic norms. Moreover, the insolvency figures don't include thousands of businesses that are quietly removed from the Companies House register every quarter.

"Although most of these are inactive businesses, there are others who avoid the formal insolvency process and scrutiny of a liquidator to close down without repaying money to taxpayers and other creditors."

Sykes also commented on the personal insolvencies:

"Personal insolvencies are continuing to fall. These latest results mean that numbers are at their lowest level since 2005. Record low inflation will help relieve some pressure on those living at the edge of their means.

"The upcoming changes to Debt Relief Orders could have helped bring down the number of people applying for a debtor petition bankruptcy: they might be trying to hold off before they can enter a Debt Relief Order under the more generous entry conditions to be introduced in October.

"It is interesting to see the steep decline in Individual Voluntary Arrangements. It may be too early to draw conclusions but demand could be falling as a result of low interest rates, low inflation and tighter regulation. This trend is worth watching. Corporate insolvency.

Contact Us – UK Legal Insolvency Litigation with Advantage

Whether you wish to commence legal proceedings or challenge those that are being brought against you, our specialist insolvency team can guide you through the procedures. Further, if are worried about the costs involved, Advantage Litigation Services have the skills and expertise to help you find a way of funding commercial litigation without risking your personal finances or those of your business. Click here to contact us today or call 0800 160 1298 to see how we can help.

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