Insolvency figures show drop
The number of businesses being taken into administration has dropped by nearly 60pc in the first three months of the year compared to the previous quarter, according to figures released by the Insolvency Service yesterday.
But insolvency experts in the region warned that the figures may mask a large number of corporate insolvencies yet to come through the system.
According to the Insolvency Service, there were 783 companies in administration - in which an insolvent firm is place in the hands of administrators and managed with the hope of it continuing as a going concern - across England and Wales in the first quarter.
This was a 40pc year on year decline, and followed a 58pc annual fall in the previous quarter.
The number of corporate insolvencies fell by 4pc to 4,196 - at its lowest level since the third quarter of 2008.
But Chris Williams, eastern region council member of R3 the insolvency trade body and partner at business rescue and insolvency firm McTear Williams & Wood, said:
"Today's drop in corporate insolvencies comes as a surprise to many and masks a large number of corporate insolvencies that have yet to come through the system.
We should expect a spike in the number of insolvencies in the five or six quarters following a receission because of the tightening of lending requirements and a possible increase in interest rates. Although many businesses see the 'green shoorts' recovery during this period, the ensuring rise in their asset value can encourage creditors to move ahead with more aggressive debt collection.
The total for individuals was 7pc more than the previous three months, with 18,256 people going bankrupt, but this was down on the same period of 2009 when there were a record of 20.446 bankruptcies.
The number of poeple taking out an individual voluntary arrangement (IVA), under which interest on debt is frozen in exchange for a set amount being repaid each month, dropped by 11pc to 11,782.
There was also a 6pc rise in debt relief orders, which offer an alternative to bankruptcy for people with debts less than £15,000, assets of less than £300 and less than £50 surplus income a month, with 5,644 people taking out one of the orders.
Eastern Daily Press
8 May 2010