There was a total of 955 company insolvencies in England and Wales in July, a decrease of 34% compared to the same month last year, new data published the Insolvency Service has revealed.
The Insolvency Service, an executive agency of the Department for Business, suggested this was primarily driven by a decrease in the numbers of creditors’ voluntary liquidations (CVLs) and compulsory liquidations, which fell by 41% and 36% respectively.
Figures revealed that the total number of insolvencies was comprised of 590 CVLs, 166 compulsory liquidations, 182 administrations and 17 company voluntary arrangements (CVAs). The number of CVAs in July 2020 was also 56% lower than in the same month last year, though the Insolvency Service suggested the numbers were small.
The executive agency indicated that the overall reduction in company insolvencies was likely to be in part driven by the range of government support put in place to financially support to companies in response to the COVID-19 pandemic.
“Rarely has data been so disconnected from reality,” commented Sarah Hayes, strengths and resilience coach at Strengths Director Coaching.
“While both debt relief orders and bankruptcies are down compared to July last year, and individual voluntary arrangements at roughly the same level, we know this is because the Government and creditors are holding back for now.
“With the number of people losing their jobs rising sharply, and more and more companies struggling, it’s very clear this is the calm before the storm. As the furlough scheme is unwound and the various support measures for those businesses luckily enough to have received them are removed, the number of people facing financial problems will skyrocket.
“We are already seeing the psychological toll COVID-19 is taking on people and business and its severity is set to soar in the months ahead. There is a huge amount of emotion and pain when people and businesses struggle financially and the Government needs to start preparing to manage this impending crisis sooner rather than later.”
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