The UK’s insolvency profession has played an important part in helping to rescue approximately two-in-five insolvent businesses in 2013-14, according to research by ComRes and R3, the insolvency trade body.

The research found that R3 members helped around 6,700 businesses (41% of formal insolvencies) continue trading in some way after entering insolvency, helping to save around 230,000 jobs.

“There is much more to insolvency than business or personal finance failure,” explained Phillip Sykes, President of R3. “As the economy continues to recover from recession, business recovery and renewal will be an important part of the economic landscape.”

“Insolvency practitioners witness first-hand the human cost of business failure and will make every effort to protect jobs where possible,” he added. “The sooner insolvency practitioners’ advice is sought, the more chance there is of business and job rescue. The insolvency profession is increasingly helping businesses outside of formal insolvency procedures too.”

In total, around 10,400 businesses continued operating after working with the insolvency profession, either benefitting from support in a formal insolvency or working with the profession to avoid insolvency. These businesses employed approximately 540,000 after receiving support.

“The next five years could see key changes to the insolvency landscape,” commented Phillip Sykes. “Household debts are rising again, while the current climate of creditor forbearance, record low inflation, and record low interest rates may not last. Problem debt is a major policy issue for the new Government; the insolvency profession has a unique insight into the effects problem debt has – and, importantly, how it can be tackled.”

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Source:

https://www.r3.org.uk/index.cfm?page=1114&element=21487&refpage=1008