The Insolvency statistics for the months July to September 2016 have been released and show the need for businesses to remain vigilant about invoices and payments.
The insolvency statistics for the months July to September 2016 have been released by the government and show the need for businesses to remain vigilant about invoices and payments. The statistics show a continued increase in the number of both companies and individuals entering insolvency.
Since 6 April 2016, the process for an individual to make themselves bankrupt, became more simple, removing the need for the court’s involvement and the process being commenced online. It might be that this change has been a factor in the number of bankruptcies increasing from the previous quarter.
Since 1 October 2015, the minimum debt a creditor must be owed to make someone bankrupt was increased from £750 to £5,000. It was expected this would create a reduction in the number of creditor bankruptcy petitions but as of yet, that decease hasn’t happened.
The number of people entering into IVAs has also increased.
Of companies becoming insolvent, those in construction and the motor trades are the first and second most common.
What this all means is that businesses need to be careful who they extend credit to and for how much. It also means that it remains as fundamental as ever to have good credit control systems and to pursue outstanding invoices promptly. If you need help with collecting outstanding invoices, please contact the litigation team.