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The insolvency statistics have just been released for September 2023. In this blog, we’re going to talk you through the UK insolvency figures for September 2023.

Company closures

September alone saw 1967 company closures in England and Wales. Just over 1500 of these were closed through a Creditors’ Voluntary Liquidation (CVL). In these cases, you’ll liquidate the business, the debts are written off (providing you meet checks), and the company is closed.

Compulsory liquidations

There were 255 compulsory liquidations. When you liquidate a company, you usually have two options. For a responsible director, the voluntary option is always the best route. But, when a creditor has exhausted all routes of trying to retrieve the money they are owed from you, they will petition to wind your business up through court. When this happens, you’ll get a winding-up petition on your desk along with a court date. If you can’t pay the money, your business will be closed by compulsory liquidation.

The consequences of compulsory liquidation are generally more severe than when voluntary liquidation is used.

Company Voluntary Arrangements

There were only 11 company voluntary arrangements organised in September. Company voluntary arrangements, or CVAs, are for companies that are viable going forward but are dealing with some cash flow problems right now. These act as protection for a company. These arrangements allow companies to put all of their unsecured debt into one pot. Then, the insolvency practitioner negotiates with creditors to pay these debts over an extended period of time. In most cases, this is for around 60 months or five years.

As an example, let’s say you are in debt by £500,000, and it’s due to be paid in the next 60 days. With a CVA, you will hopefully be able to restructure that debt over five years. It’s very important that you seek advice and take time to establish whether a CVA is suitable for your company.

Administrations

Additionally, there were 125 company administrations. Administrations are slightly bigger than liquidations. In these scenarios, an administrator is called in to figure a way out of the situation. This gives the business more protection until things can be sorted out.

How does this compare to September 2022?

Overall, this month, these figures are 17% higher than they were during the same month last year. From these figures, you can see that there are more people having problems, and we can see this in the amount of calls we are experiencing.

Since COVID-19, we are now seeing businesses that were healthy three years ago and are now running out of room to grow and be successful.

If your business is in distress, we recommend that you take advice early. The earlier that you seek advice from an insolvency professional, the more likely you’ll be to get a favourable outcome for everyone involved. We hope you found this information useful. We’re here for you as a director, so feel free to give us a call regarding your business situation.A

Author Bio

I'm Chris Worden, Managing Director at Director First. With over 7 years of experience, I help UK directors navigate the complex world of UK corporate insolvency. We offer free and independent advice to UK directors and advise them about what options may be available to them if their limited company starts to struggle.

I am passionate about helping other directors overcome their business challenges and get back on their feet, as I was once in the same position as them. I had a business that became insolvent, and the advice out there was confusing and overwhelming. I am here to provide honest and valuable advice to UK directors.

I am proud to say that we are one of the only 5-star corporate insolvency companies on Trustpilot with hundreds of 5-star reviews, and we publish videos weekly on our YouTube channel. Our channel is designed to educate UK directors about insolvency and debt advice.

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