Corporate insolvency rate drops but compulsory liquidations rise in short term

Published on November 2, 2012 by Crawfords Accounting

Corporate insolvency is down, according to the latest official figures from the Insolvency Service; however, compulsory liquidations are on the increase in the short term.

In the third quarter of 2012, 3,971 compulsory liquidations and creditors’ voluntary liquidations were recorded, on a seasonally adjusted basis, throughout England and Wales.

Overall, that represents a 6.6% annual drop in corporate insolvency, with a slightly more modest 2.8% quarterly fall in the company insolvency rate.

However, it’s not all positive news, as the rate of compulsory company insolvency rose by 5.5% over the previous quarter, to reach 1,092.

Apart from this short-term problem, company liquidation as a whole seems to be improving steadily; compulsory liquidations are down 10.2% year-on-year.

Within creditors’ voluntary company liquidations, the quarter showed a 5.6% improvement over Q2 2012, and a 5.1% improvement over Q3 2011.

In the ‘other’ category – comprising receiverships, administrations and company voluntary arrangements – a particularly large drop was seen.

With just 986 ‘other’ corporate insolvencies in Q3 2012, that represents an annual drop of 21% compared with the same period of 2011.


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