Personal insolvencies increased by 60% to 11,939 in October 2020, compared to September’s figure of 7,458, according to the latest Insolvency Service data.
Personal insolvencies were also higher than October 2019’s figure of 10,030, although there’s been no corresponding increase in corporate insolvencies.
There were 1,572 debt relief orders (DROs) and 1,048 bankruptcies in October 2020. The bankruptcies were made up of 970 debtor applications and 78 creditor petitions. This is a slight increase on September’s figures, but around a third lower compared with October 2019.
There were, on average, 6,154 IVAs registered in each of the three months ending October 2020, nearly double the number from September 2020. This was however nine percent lower than the rolling three month average observed in the same period ending October 2019.
Louise Brittain, restructuring and insolvency partner at Azets, a regional accountancy and business advisor to SMEs, said: “The October insolvency numbers suggest that UK households are at increasing risk from carrying higher levels of personal debt. This is perhaps no surprise given the economic impact of the pandemic but it’s only likely to get more difficult as the expected levels of unemployment increases into the early part of next year.”
Colin Haig, president of insolvency and restructuring trade body R3, said: “Gravity cannot be defied forever, and – with temporary measures stopping creditor enforcement actions against debtors due to expire at the end of the year – the first few months of 2021 could turn out to be difficult ones for large swathes of businesses which have built up arrears with landlords, suppliers, or the taxman.”
Corporate insolvencies decreased to 856 in October 2020 compared to September’s figure of 925, and remained below October 2019’s figure of 1,485.
This figure is comprised of 672 creditors’ voluntary liquidations, 59 compulsory liquidations, 104 administrations and 21 company voluntary arrangements.