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15 May, 2020 Open access

Individual voluntary arrangements increased by more than a third in April 2020 compared to same month last year

However, first in a new monthly statistics series during the coronavirus crisis also shows that bankruptcy and DRO numbers have fallen

The number of individual voluntary arrangements (IVAs) increased by more than a third in April 2020 compared to the same month last year.

In the first of a new monthly statistics series, to provide more up to date information on the numbers of companies and individuals who are unable to pay debts and enter a formal insolvency procedure during the coronavirus (COVID-19) crisis, the Insolvency Service highlights that there were 10,397 individual insolvencies in April 2020 in England and Wales, consisting of -

Commenting on the figures, the Insolvency Service warns that changes in monthly volumes of IVAs may be due in part to how promptly and frequently they are registered by providers - in turn, affected by changes in working practices and fee requirements during the UK lockdown - and caution should be taken when comparing IVA registrations over a shorter time period.

In addition, the Service highlights further likely impacts that the UK lockdown is having on numbers of individual insolvencies -

‘The overall average daily number of individual insolvencies appeared to return to pre-lockdown levels in April. However, this was driven by the high volume of IVAs registered in the month.

The average number of daily DROs and Bankruptcies remained low in April, when compared with the pre-lockdown period of March. The fall in debtor bankruptcies and DROs corresponds with a reduction in applications for these services, which coincided with the announcement of enhanced government financial support for individuals and businesses since the emergence of the coronavirus pandemic. The fall in debtor bankruptcies may have also been partly driven by the reduction in court activity.

The fall in creditor bankruptcies will likely have been a result of reduced HMRC enforcement activity during this period and in part, a result of reduced operational running of the courts during this time.’

For more information, see Monthly Insolvency Statistics April 2020 from gov.uk