Fewer firms went bust over the last quarter.
Personal insolvencies fell in the last three months.
The number of bankruptcies and insolvencies dropped in the last few months, according to figures revealed by the Insolvency Service. However, analysts are warning that the improvements are not expected to last.
In the three months leading up to September there were 33,935 personal insolvencies, which is 3.7% fewer than the same period last year. Included in this figure were bankruptcies, which totalled 13,907, Individual Voluntary Arrangements that reached 12,960 and just over 7,000 Debt Relief Orders. However, these figures are still much higher than the number of insolvencies that occurred before the recession hit.
Just under 4000 companies went into liquidation, which is a 2.2% drop compared to the previous quarter and a fall of 13.9% over the course of the year, but experts are concerned that difficulties will still continue for many firms due to the reluctance of banks to lend out capital.
Smaller companies could also be affected by the austerity measures put in place by the Con-Lib government especially if interest rates were to rise.
A fifth of companies are concerned about debt levels according to separate research carried out by R3, the association of business recovery professionals. The poll also highlighted that if servicing debt becomes more expensive it could trigger more corporate insolvencies. The firm predicted that there could be 27,500 corporate insolvencies next year and outlined that almost a million people are struggling with debt and failing to seek the proper advice. Half a million people are attempting to reduce their debts in ways that haven’t been recorded through official data.
Partner at accountants Deloitte Louise Brittain, said: “The high numbers of people filing for bankruptcy is unfortunately becoming the norm, and whilst today’s figures are down… we should not take this drop as a necessary sign of things to come”.