Insolvencies are on the increase in 2024

Commercial Landlords are advised to not delay in taking action for rent arrears as the number of company insolvencies rise in 2024

As Commercial Landlords you have priviliges that other creditors do not have to recover money owed to you. You have available Commercial Rent Arrears Recovery (CRAR), and the right to forfeit a lease.

However, these options disappear when a tenant enters most types of insolvency.

When a tenant goes into administration the landlord can find themselves in a very different and difficult position, without the option of CRAR or forfeiture of lease, or able to enforce a County Court Judgment.

The Debt Respite Scheme (Breathing Space) will give someone in problem debt the right to legal protections from their creditors.

• Standard Type Breathing Space lasts 60 days and during that time no action can be taken against a debtor once granted. This includes, visits, letters and telephone calls. Also no interest can be charged on the debt during this period.
• Mental Health Crisis Breathing Space is for debtors who are experiencing a mental health crisis. This type of breathing space will continue for the duration of the person’s treatment, plus 30 days.

Delaying taking action for rent arrears may leave the landlord unable to collect money owed or forfeit the lease for a long time until the administration is lifted.

Insolvencies 2024

Company Insolvencies

The number of registered company insolvencies in February 2024 was 2,102, 17% higher than in the same month in the previous year (1,801 in February 2023). This was higher than levels seen while the Government support measures were in place in response to the coronavirus (COVID-19) pandemic and also higher than pre-pandemic numbers.

The company insolvencies consisted of 217 compulsory liquidations, 1,707 creditors’ voluntary liquidations (CVLs), 166 administrations and 12 company voluntary arrangements (CVAs). Numbers of compulsory liquidations, CVLs, and administrations were higher than in February 2023.

Individual Insolvencies

For individuals, the total number of insolvencies in February 2024 was 10,136, 23% higher than in the same month in the previous year (8,239 in February 2023).

The individual insolvencies consisted of 709 bankruptcies, 3,007 debt relief orders (DROs) and 6,420 individual voluntary arrangements (IVAs). The higher number of individual insolvencies compared to February 2023 was driven by a 44% increase in the number of DROs, and 16% increases in both the number of bankruptcies and IVAs.

Breathing Space Registrations

There were 8,073 Breathing Space registrations in February 2024, which is 10% higher than the number registered in February 2023. 7,964 were Standard breathing space registrations, which is 11% higher than in February 2023, and 109 were Mental Health breathing space registrations, which is 22% lower than the number in February 2023.

The Statistics can be found at The Insolvency Service.

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