Official Statistics

Commentary - Monthly Insolvency Statistics May 2022

Published 17 June 2022

Released

17 June 2022

Next release

15 July 2022

Media enquiries

Steven Fifer

+44 (0)30 3003 1568

Statistical enquiries

Stacey Witchell (author)

statistics@insolvency.gov.uk

David Webster (responsible statistician)

1. Main Messages for England and Wales

The number of registered company insolvencies in May 2022 was 1,817:

• 79% higher than in the same month in the previous year (1,014 in May 2021), and
• 34% higher than the number registered three years previously (pre-pandemic; 1,352 in May 2019).

In May 2022 there were 1,584 Creditors’ Voluntary Liquidations (CVLs), 70% higher than in May 2021 and 66% higher than May 2019. Numbers for other types of company insolvencies, such as compulsory liquidations, remained lower than before the pandemic, although there were four times as many compulsory liquidations in May 2022 compared to May 2021, and the number of administrations was 95% higher than a year ago.

Figure 1 shows the historical trend of company insolvencies covering the past three years. Monthly numbers back to January 2019 can be found in Table 1 of the accompanying tables.

Figure 1: The number of registered company insolvencies in May 2022 was higher than pre-pandemic levels, driven by a higher number of CVLs.

England and Wales, May 2019 to May 2022, Not seasonally adjusted

Sources: Insolvency Service (compulsory liquidations only); Companies House (all other insolvency types)

For individuals, 566 bankruptcies were registered, which was 23% lower than in May 2021 and 61% lower than May 2019.

There were 2,030 Debt Relief Orders (DROs) in May 2022, which was 33% higher than in May 2021 but 11% lower than the pre-pandemic comparison month (May 2019). The increase compared to last year is linked to changes to the eligibility criteria on 29 June 2021 including an increase in the level of debt at which people can apply for a DRO from £20,000 to £30,000. In the 11 months since the change in DRO eligibility criteria, an estimated 7,787 individuals have had a DRO approved who would not have previously been eligible.

There were, on average, 7,812 IVAs registered per month in the three-month period ending May 2022, which is 6% higher than the three-month period ending May 2021, and 10% higher than the three-month period ending May 2019. IVA numbers have ranged from around 6,300 to 7,800 per month over the past year.

Note that the IVA series is historically volatile as it is based on date of registration at the Insolvency Service (see the Methodology and data quality section for more information).

Figure 2 shows the historical trend of individual insolvencies covering the past three years. Monthly numbers back to January 2019 can be found in Tables 3 and 4.1 of the accompanying tables. Note that IVA numbers shown are three-month rolling averages and are therefore not directly comparable to the monthly numbers of bankruptcies and DROs.

Figure 2: Following a change in DRO eligibility criteria in June 2021, the number of DROs has increased. Bankruptcies have remained lower than both pre-pandemic and 2020 levels. IVA numbers have remained stable.

England and Wales, May 2019 to May 2022, Not seasonally adjusted

Source: Insolvency Service

Due to a temporary data reporting system issue, data from one working day of April 2022 is missing and numbers are therefore likely to be revised upwards in a future month’s release. This includes data for all individual insolvencies in England and Wales, as well as compulsory liquidations in England and Wales.

There were 5,749 Breathing Space registrations in May 2022, which is 6% lower than the number registered in May 2021. 5,638 were Standard breathing space registrations, which is 7% lower than in May 2021, and 111 were Mental Health breathing space registrations, which is 136% higher than the number in May 2021.

From the start of the coronavirus (COVID-19) pandemic until mid-2021, overall numbers of company and individual insolvencies were low when compared with pre-pandemic levels. While CVL numbers are now higher than pre-pandemic levels, numbers for other insolvency procedures, such as compulsory liquidations for companies and bankruptcies for individuals, remain lower. These trends are likely to be partly driven by government measures put in place to support businesses and individuals during the pandemic, including:

• Temporary restrictions on the use of statutory demands and certain winding-up petitions (leading to company compulsory liquidations).
• Enhanced government financial support for companies and individuals.

On 30 September 2021, some of these temporary measures either ended or were replaced by new tapering measures. On 31 March 2022, all of the remaining temporary insolvency measures ended.

2. Things you need to know about this release

This monthly series supplements the Insolvency Service’s quarterly company and individual insolvency National Statistics 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, as we emerge from the pandemic.

These statistics present monthly numbers of individual and company insolvencies in England & Wales and Northern Ireland. For Scotland, only monthly company insolvency statistics are presented. Until May 2021, monthly individual insolvency statistics for Scotland were published on the Accountant in Bankruptcy (AiB) website. However, this publication has now been discontinued as per this bulletin. Quarterly statistics on the number of individual insolvencies in Scotland continue to be published.

All figures presented within this release are provisional and subject to review. Further detail can be found in the accompanying Monthly Statistics Methodology and Quality document. Historical data presented within this statistical release may not be consistent with the previously published quarterly company and individual insolvency National Statistics.

For individuals, the Breathing Space scheme, launched on 4 May 2021, gives people legal protections from their creditors for 60 days, with most interest and penalty charges frozen, and enforcement action halted. Because problem debt can be linked to mental health issues, these protections are also available for people in mental health crisis treatment – for the full duration of their crisis treatment plus another 30 days. The numbers of breathing space registrations are included in these monthly statistics. Individuals that register for breathing space may or may not end up entering a formal insolvency procedure. Those that do enter a formal insolvency procedure will be counted accordingly in Tables 3 to 6 of the accompanying tables.

New monetary eligibility limits for Debt Relief Orders in England & Wales came into effect on 29 June 2021. This included the level of debt at which people can apply for a DRO being increased from £20,000 to £30,000, as well as other changes as described in the Glossary. More people are now able to access this form of debt solution as a result of these changes.

Due to a temporary data reporting system issue, data from one working day of April 2022 is missing and numbers are therefore likely to be revised upwards in a future month’s release. This includes data for all individual insolvencies in England and Wales, as well as compulsory liquidations in England and Wales.

2.1 Interpretation of these statistics

Please note that some caution needs to be applied when interpreting these statistics. Notably:

• The underlying monthly data have not been seasonally adjusted and therefore comparisons are made with the same month in 2019 (pre-pandemic) and the same month of the previous year.
• Individual voluntary arrangements (IVAs) are reported based on date of registration at the Insolvency Service, rather than date of approval. There can be a delay between month of approval and month of registration. Due to the volatility of the underlying data on registered IVAs, three-month rolling averages have also been presented to smooth out the data. However, neither counts nor three-month rolling-averages are reliable enough to indicate short-term IVA trends.
• This statistical release presents the numbers of creditors’ voluntary liquidations (CVLs), administrations, company voluntary arrangements (CVAs) and receivership appointments based on their registration date at Companies House, and therefore reflect company insolvency registrations rather than insolvency procedure start dates.
• Numbers of DROs that meet the new and old eligibility criteria are considered an estimate. This is because it is based on the recorded total debts, income and asset values in each case. Information on the value of assets is dependent on individual declarations and may be incomplete or unreliable in some cases.

3. Company and Individual Insolvencies in England and Wales

In this release comparisons are made to both May 2021, which was during the COVID-19 pandemic, and May 2019 which was before the start of the pandemic.

3.1 Company Insolvencies

This statistical release presents the numbers of CVLs, administrations, CVAs and receivership appointments based on their registration date at Companies House, and therefore reflect company insolvency registrations rather than insolvency procedure start dates. Compulsory liquidation data are sourced by the Insolvency Service and provide an accurate measure of the number of new cases in each month. Data for the latest month were extracted from a live system five working days after month end and therefore figures are provisional.

The number of company insolvencies was 34% higher than in May 2019 and 79% higher than the number in May 2021.

The increase in company insolvencies was driven by an increase in the number of CVLs, which were 66% higher than in May 2019 and 70% higher than in May 2021. Other insolvency types were lower than in May 2019, although compulsory liquidation numbers were four times higher and administrations were 95% higher than the number in May 2021.

Of the 1,817 registered company insolvencies in May 2022:

• There were 1,584 CVLs, which is 70% higher than in May 2021 and 66% higher than in May 2019;
• 135 were compulsory liquidations, which is 297% (4 times) higher than May 2021, but 50% lower (half the number) than May 2019;
• 14 were CVAs, which is more than double the amount in May 2021 but 55% lower than May 2019;
• There were 84 administrations, which is 95% higher than May 2021 but 12% lower than May 2019; and
• There were no receivership appointments.

Figure 1 shows the historical trend of company insolvencies covering the past three years. Monthly numbers back to January 2019 can be found in Table 1 of the accompanying tables.

Figure 1 (repeated from above): The number of registered company insolvencies in May 2022 was higher than pre-pandemic levels, driven by a higher number of CVLs.

England and Wales, May 2019 to May 2022, Not seasonally adjusted

Sources: Insolvency Service (compulsory liquidations only); Companies House (all other insolvency types)

Between 26 June 2020 and 31 May 2022, in England & Wales, 38 moratoriums were obtained and 12 companies had a restructuring plan registered at Companies House. These two new procedures were created by the Corporate Insolvency and Governance Act 2020.

Monthly company insolvency data for England & Wales can be found in the accompanying tables. Further breakdowns of company insolvencies by Standard Industrial Classification (SIC 2007) are also presented to three-digit level.

3.2 Individual Insolvencies

In this statistical release the numbers of DROs and bankruptcies are presented separately to numbers of IVAs, as IVA numbers have been calculated using different methodology. Further details are provided in the IVA results section below.

Data for the latest month were extracted from a live system five working days after month end and are subject to change. Therefore, figures are provisional.

Bankruptcies and debt relief orders

There were 2,030 DROs and 566 bankruptcies in May 2022 in England & Wales.

The bankruptcies were made up of 497 debtor applications and 69 creditor petitions. Monthly bankruptcy numbers between July 2021 and May 2022 were lower than the numbers in 2020, which were already lower than pre-pandemic levels.

Bankruptcies were 23% lower than in May 2021. Debtor applications were 23% lower and creditor petitions were 19% lower than May 2021.

Compared to May 2019, total bankruptcies were 61% lower; debtor applications were 57% lower and creditor petitions were 77% lower.

Figure 3 shows the historical trend of bankruptcies and DROs covering the past three years. Monthly numbers back to January 2019 can be found in Table 3 of the accompanying tables.

Figure 3: Following a change in DRO eligibility criteria in June 2021, the number of DROs has increased. Bankruptcies have remained lower than both pre-pandemic and 2020 levels.

England and Wales, May 2019 to May 2022, Not seasonally adjusted

Source: Insolvency Service

Monthly data on DROs and bankruptcies in England & Wales can be found in the accompanying tables, including bankruptcies by employment status. Bankruptcies amongst the self-employed are also presented to the two-digit Standard Industrial Classification (SIC 2007). Due to the small numbers reported it is not feasible to present this information to a three-digit level.

The number of DROs in May 2022 was 33% higher than in May 2021, but 11% lower than in May 2019. Changes to DRO eligibility came into effect on 29 June 2021, including an increase in the level of debt at which people can apply for a DRO from £20,000 to £30,000. The increase in the number of DROs registered since June 2021 is likely to have been caused by this expansion of the eligibility criteria, as indicated on Figure 4.

In the 11 months since the change in DRO eligibility criteria, an estimated 7,787 individuals have had a DRO approved who would not have previously been eligible. This means that (assuming no changes to application behaviour) the number of DROs is approximately 55% higher than it would have been without the change to criteria. Numbers of DROs that meet the new and old eligibility criteria are considered an estimate. This is because it is based on the recorded total debts, income and asset values in each case. Information on the value of assets is dependent on individual declarations and may be incomplete or unreliable in some cases.

Figure 4 shows the historical trend covering the past three years. Monthly numbers back to January 2019 can be found in Tables 3 and 3.1 of the accompanying tables.

Figure 4: An estimated 7,787 individuals have had a DRO approved since June 2021 who would not have been eligible under the old criteria.

England and Wales, May 2019 to May 2022, Not seasonally adjusted

Source: Insolvency Service

Individual voluntary arrangements

The underlying data for IVA registrations are volatile from one month to the next, so month on month comparisons are not valid. It is particularly important to consider longer term trends when making assessments of IVAs.

Three-month rolling averages are presented to smooth the data and indicate what the overall trend of IVA registrations might look like if the underlying data were less volatile. Further information on the volatility of the IVA data, and the calculation of three-month rolling averages can be found in the accompanying Monthly Statistics Methodology and Quality document. For transparency, both counts and three-month rolling averages are presented in Figure 4 and in the accompanying tables. Whilst three-month rolling averages are used to consider potential changes in IVA trends over time, both sets of numbers should be used with caution.

There were, on average, 7,812 IVAs registered per month in the three-month period ending May 2022, 6% higher than for the three-month period ending May 2021 and 10% higher than the three-months ending May 2019.

Figure 5 shows the historical trend covering the past three years. Monthly numbers back to January 2019 can be found in Tables 4 and 4.1 of the accompanying tables.

Figure 5: The number of IVAs registered over the past year has ranged from 6,300 to 7,800 per month, which is similar to pre-pandemic levels

England and Wales, May 2019 to May 2022, Not seasonally adjusted

Source: Insolvency Service

IVA registrations presented in Figure 5 are the numbers of registrations with the Insolvency Service in each month. The rolling three-month averages presented are mean average number of registered IVAs in the three months ending in the reference period. For example, the three-month rolling average estimate for May 2022 is the calculated mean average of the total IVA registrations during March, April and May 2022.

Breathing Space Registrations

In May 2022 there were 5,749 breathing space registrations. This is 6% lower than the number in May 2021.

Of the 5,749 Breathing Space registrations in May 2022:

• There were 5,638 Standard breathing space registrations, which is 7% lower than the number in May 2021.

• There were 111 Mental Health breathing space registrations, which is 136% higher than the number in May 2021.

Monthly breakdowns can be found in Table 7 of the accompanying tables.

Figure 6: Since the launch of the Breathing Space scheme in May 2021, there have been an average of around 5,400 registrations each month

England and Wales, May 2021 to May 2022, Not seasonally adjusted

Source: Insolvency Service

4. Company Insolvencies in Scotland

Legislation relating to company insolvency in Scotland is partly devolved. AiB, Scotland’s Insolvency Service, administers the Register of Insolvencies, which is a publicly accessible statutory register regarding the insolvency of individuals and businesses in Scotland, and includes company liquidations and receiverships.

This statistical release presents the numbers of compulsory liquidations, CVLs, administrations, CVAs and receivership appointments based on their registration date at Companies House, and therefore reflect company insolvency registrations rather than insolvency procedure start dates.

In May 2022 there were 93 company insolvencies registered in Scotland, 82% higher than May 2021 and 19% higher than in May 2019. This was comprised of 19 compulsory liquidations, 68 CVLs, and six administrations. There were no CVAs or receivership appointments.

Historically, the volume of company insolvencies registered in Scotland has been driven by compulsory liquidations. However, since April 2020, there have been more than three times as many CVLs as compulsory liquidations.

Figure 7 shows the historical trend of company insolvencies in Scotland covering the past three years. Monthly numbers back to January 2019 can be found in Table 8 of the accompanying tables.

Figure 7: In May 2022, the number of registered company insolvencies was higher than in May 2021 and higher than pre-pandemic levels

Scotland, May 2019 to May 2022, Not seasonally adjusted

Source: Companies House

Between 26 June 2020 and 31 May 2022, in Scotland, no moratoriums were obtained and two companies had a restructuring plan registered at Companies House. These two new procedures were created by the Corporate Insolvency and Governance Act 2020.

Monthly company insolvency data for Scotland can be found in the accompanying tables. Further breakdowns of company insolvencies by Standard Industrial Classification (SIC 2007) are also presented to two-digit level. Due to small numbers it was not feasible to present this information to three-digit level.

Note that this statistical bulletin does not present monthly individual insolvency statistics for Scotland. Until May 2021, monthly individual insolvency statistics for Scotland were published on the Accountant in Bankruptcy (AiB) website. However, this publication has now been discontinued as per this bulletin. Quarterly statistics on the number of individual insolvencies in Scotland continue to be published.

5. Company and Individual Insolvencies in Northern Ireland

Company and individual insolvency in Northern Ireland is governed by separate, but broadly similar, legislation to England & Wales. Figures are presented separately.

5.1 Company Insolvencies

This statistical release presents the numbers of CVLs, administrations, CVAs and receivership appointments based on their registration date at Companies House, and therefore reflect company insolvency registrations rather than insolvency procedure start dates.

In May 2022 there were 20 company insolvencies registered in Northern Ireland, 2.6 times as many as in May 2021, but 50% lower than May 2019. This was comprised of three compulsory liquidations and 17 CVLs. There were no administrations, CVAs or receivership appointments.

Figure 8 shows the historical trend of company insolvencies in Northern Ireland covering the past three years. Monthly numbers back to January 2019 can be found in Table 10 of the accompanying tables.

Figure 8: Overall, numbers of registered company insolvencies have remained lower than pre-pandemic levels since the start of the first UK lockdown in March 2020

Northern Ireland, May 2019 to May 2022, Not seasonally adjusted

Sources: Companies House and Department for the Economy

5.2 Individual Insolvencies

In May 2022 there were 144 individual insolvencies in Northern Ireland, 26% lower than in May 2021, and 39% lower than May 2019. This consisted of 128 IVAs, eight DROs and eight bankruptcies.

Figure 9: Overall, numbers of individual insolvencies have remained lower than pre-pandemic levels since the start of the first UK lockdown in March 2020

Northern Ireland, May 2019 to May 2022, Not seasonally adjusted

Source: Department for the Economy

Figure 9 shows the historical trend of individual insolvencies in Northern Ireland covering the past three years. Monthly numbers back to January 2019 can be found in Table 11 of the accompanying tables. It should be noted that there were no new individual insolvencies in Northern Ireland in April 2020 as a result of the lockdown measures being implemented by the Northern Ireland Executive which resulted in the closure of the Courts and Insolvency Service offices in the region.

6. Data and Methodology

6.1 Data Sources

Company insolvency data for England & Wales, Scotland and Northern Ireland are sourced from Companies House, except for compulsory liquidation data for England & Wales and Northern Ireland. Compulsory liquidation data for England & Wales are sourced from the Insolvency Service case information system (ISCIS). Compulsory liquidation data for Northern Ireland are sourced from the Department for the Economy, Northern Ireland.

Individual insolvency data for England & Wales are sourced from ISCIS; individual insolvency data for Northern Ireland are sourced from the Department for the Economy.

Individual breathing space data are sourced from the Breathing Space register, owned by HM Treasury (HMT), for which the Insolvency Service is a custodian.

Moratorium and Restructuring Plan data are sourced from Companies House.

More information on the administrative systems used to compile insolvency statistics can be found in the accompanying Monthly Statistics Methodology and Quality document.

6.2 Coverage

This statistical release presents company insolvencies for England & Wales, Scotland and Northern Ireland. Individual insolvencies are presented for England & Wales, and Northern Ireland only. Individual insolvency statistics for Scotland can be found on the AiB website, although the monthly publication has been discontinued as per this bulletin. Insolvency statistics for Scotland and Northern Ireland are presented separately to statistics for England & Wales since they may not be comparable as they are covered by separate legislation and policy responsibility lies with the devolved administrations.

6.3 Methodology and data quality

Detailed methodology and quality information for the monthly insolvency statistical releases can be found in the accompanying Monthly Statistics Methodology and Quality document.

The main quality and coverage issues to note:

1. This statistical release presents the numbers of CVLs, administrations, CVAs and receivership appointments based on their registration date at Companies House, therefore reflecting company insolvency registrations rather than insolvency procedure start dates.
2. There is known seasonality in the underlying data for most insolvency types. Any seasonality is normally adjusted before compiling insolvency statistics. However, these monthly data have not been seasonally adjusted so month-on-month comparisons may not be valid.
3. Insolvency Service data for the most recent month were only extracted five working days after month end so there is an increased likelihood that published statistics for the latest month may be revised in the future. Companies House data are revised quarterly for the previous three months in the January, April, July and October publications. Therefore, all figures in this release are provisional.
4. The sum of these monthly statistics may not equal previously published quarterly statistics, due to differing methodologies. In addition, the administrative systems used to capture data are live systems and are subject to amendments.
5. The underlying IVA data are volatile from one month to the next and create difficulty in constituting reliable short-term trends, since changes over time may be partly a result of IVA provider activity and not just true changes in numbers of IVAs. Therefore, in addition to counts of IVA registrations, three-month rolling averages have also been calculated to smooth the data and indicate what the overall trend of IVA registrations might look like if the underlying data were less volatile. For transparency, both the counts of IVA registrations and three-month rolling averages are presented in the statistics. However, both sets of numbers should be used with caution.
6. Numbers of DROs that meet the new and old eligibility criteria are considered an estimate. This is because it is based on the recorded total debts, income and asset values in each case. Information on the value of assets is dependent on individual declarations and may be incomplete or unreliable in some cases.
7. These statistics may not align with information published separately by Companies House, or with data extracted from the Gazette. Further information on why numbers may not align can be found in the accompanying Monthly Statistics Methodology and Quality.

Aggregate counts of moratoriums and restructuring plans were compiled for the whole period covering 26 June 2020 to 31 May 2022.

Data quality issues affecting underlying data on individual voluntary arrangements

Individual voluntary arrangements (IVAs) are counted within these statistics once they are registered with the Insolvency Service, and they are reported by month of registration date. There is often a time lag between the date on which the IVA is accepted (known as the date of creditor agreement) and date of registration by licensed insolvency practitioners working for firms that specialise in this area, and changes in trends are often partly a result of how promptly and frequently providers register IVAs with the Insolvency Service. Therefore, these monthly statistics are considerably more volatile than the quarterly data published within the Quarterly Individual Insolvencies series, and comparisons of monthly numbers are unreliable.

In order to continue to provide timely, yet less volatile, information on IVAs, three-month rolling averages were calculated to smooth out the underlying data and present the overall direction of monthly trends. However, these statistics should still be interpreted with caution. See Methodology section of the accompanying Monthly Statistics Methodology and Quality document for further detail.

6.4 Revisions

These statistics are subject to scheduled revisions, as set out in the published Revisions Policy. Other revisions tend to be made as a result of data being entered onto administrative systems after the cut-off date for data being extracted to produce the statistics. For Insolvency Service data, there is an increased likelihood that published statistics for the most recent month will be revised in the future, because the data were only extracted five working days after month end. Companies House data are revised quarterly for the previous three months in the January, April, July and October publications. Any future revisions will be marked with an ‘[r]’ in the relevant table.

Due to a temporary data reporting system issue, data from one working day of April 2022 is missing and numbers are therefore likely to be revised upwards in a future month’s release. This includes data for all individual insolvencies in England and Wales, as well as compulsory liquidations in England and Wales.

7. Glossary

7.1 Key Terms used within this statistical bulletin

Term	Definition
Administration	The objective of administration is the rescue of the company as a going concern, or if this is not possible then to obtain a better result for creditors than would be likely if the company were to be wound up. A licensed insolvency practitioner, ‘the administrator’, is appointed to manage a company’s affairs, business and property for the benefit of the creditors.
Bankruptcy	A form of debt relief available for anyone who is unable to pay their debts. Assets owned will vest in a trustee in bankruptcy, who will sell them and distribute the proceeds to creditors. Discharge from debts usually takes place 12 months after the bankruptcy order is granted. Bankruptcies result from either Debtor application – where the individual is unable to pay their debts, and applies online to make themselves bankrupt, or Creditor petition – if a creditor is owed £5,000 or more, they can apply to the court to make an individual bankrupt. These statistics relate to petitions where a court order was made as a result, although not all petitions to court result in a bankruptcy order.
Breathing Space	For individuals, the Breathing Space scheme, launched on 4 May 2021, gives people legal protections from their creditors for 60 days, with most interest and penalty charges frozen, and enforcement action halted. Because problem debt can be linked to mental health issues, these protections are also available for people in mental health crisis treatment – for the full duration of their crisis treatment plus another 30 days.
Company Voluntary Arrangement (CVA)	CVAs are another mechanism for business rescue. They are a voluntary means of repaying creditors some or all of what they are owed. Once approved by 75% or more of creditors, the arrangement is binding on all creditors. CVAs are supervised by licensed insolvency practitioners.
Compulsory liquidation	A winding-up order obtained from the court by a creditor, shareholder or director. See Liquidation for details on the process.
Creditors’ Voluntary Liquidation (CVL)	Shareholders of a company can themselves pass a resolution that the company be wound up voluntarily. See Liquidation for details on the process. Administrations which result in a Creditors’ Voluntary Liquidation are recorded separately by Companies House and are excluded from CVL figures as they do not represent a new company entering into an insolvency procedure for the first time. These cases are only ever recorded as Administrations.
Debt Relief Order (DRO)	A form of debt relief available to those who have a low income, low assets and debt no more than a specified value. There is no distribution to creditors, and discharge from debts takes place 12 months after the DRO is granted. DROs were introduced in April 2009. A change in eligibility criteria was introduced from 29th June 2021 in which the upper limit of debt increased from £20,000 to £30,000. In addition, the threshold on the value of assets that a debtor can hold and be eligible to enter into a DRO increased from £1,000 to £2,000; the value of a single motor vehicle that can be disregarded from the total value of assets increased from £1,000 to £2,000; and the level of surplus income received by the debtor before payments should be made to creditors increased from £50 to £75 per month.
Deed of Arrangement	An alternative way for a debtor to deal with their affairs than entering into bankruptcy or an individual voluntary arrangement. Deeds of arrangement require the approval of a simple majority of creditors in number and value, and do not require a nominee, report to court or a meeting of creditors to be held.
Individual Voluntary Arrangement (IVA)	A voluntary means of repaying creditors some or all of what they are owed. Once approved by 75% or more of creditors, the arrangement is binding on all. IVAs are supervised by licensed Insolvency Practitioners.
Liquidation	Liquidation is a legal process in which a liquidator is appointed to ‘wind up’ the affairs of a limited company. The purpose of liquidation is to sell the company’s assets and distribute the proceeds to its creditors. At the end of the process, the company is dissolved – it ceases to exist. Statistics on compulsory liquidations and creditors’ voluntary liquidations are presented in these statistics. A third type of winding up, members’ voluntary liquidation is not included because it does not involve insolvency.
Moratorium	Moratoriums were introduced under the Corporate Insolvency and Governance Act 2020 to give struggling businesses formal breathing space in which to explore rescue and restructuring options, free from creditor or other legal action. Except in certain circumstances, no insolvency proceedings can be instigated against the company during the moratorium period. It also prevents legal action being taken against a company without permission from the court.
Partnership Winding-up Order	This is similar to the liquidation of a company. When the partners have decided that the partnership has no viable future or purpose then a decision may be made to cease trading and wind up the partnership. There are two basic ways that the partnership can be wound up: the creditors petition and a partner’s petition.
Receivership Appointment	Administrative receivership is where a creditor with a floating charge (often a bank) appoints a licensed insolvency practitioner to recover the money it is owed. Before 2000, receivership appointments also included other, non-insolvency, procedures, for example under the Law of Property Act 1925.
Restructuring Plan	New restructuring measures were introduced under the Corporate Insolvency and Governance Act 2020 to support viable companies struggling with unmanageable debt obligations to restructure under a new procedure. They allow the court to sanction a plan that binds creditors to a restructuring plan if it is fair and equitable. Creditors vote on the plan, but the court can impose it on dissenting classes of creditors (‘cram down’) provided that the necessary conditions are met.
Standard Industrial Classification (SIC 2007)	Used in classifying business establishments and other statistical units by the type of economic activity in which they are engaged. Further information can be found on the ONS website.