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What is Corporate Insolvency and Why it is getting Higher in England & Wales_

<br>Corporate insolvencies rose sharply in England and Wales last month, according to official data published on Friday that highlight the effect of soaring costs, higher rates and weakening demand. There were 1,933 registered company insolvencies in August, up 43 per cent from the same month last year and 42 per cent higher than in August 2019, before the pandemic. Corporate insolvencies are formal measures taken when a company becomes unable to pay its debts. A company is insolvent if its assets are insufficient to discharge its debts and liabilities. Often, an insolvent company: Is unable to

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What is Corporate Insolvency and Why it is getting Higher in England & Wales_

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  1. What is Corporate Insolvency? Why it is getting Higher in England & Wales? Corporate insolvencies rose sharply in England and Wales last month, according to official data published on Friday that highlight the effect of soaring costs, higher rates and weakening demand. There were 1,933 registered company insolvencies in August, up 43 per cent from the same month last year and 42 per cent higher than in August 2019, before the pandemic. Corporate insolvencies are formal measures taken when a company becomes unable to pay its debts. A company is insolvent if its assets are insufficient to discharge its debts and liabilities. Often, an insolvent company: Is unable to pay its debts as they fall due (cash-flow insolvency). The 2020 stats show that: Corporate insolvencies: ● ● The corporate insolvencies that took place throughout 2020 consisted of: 1. 586 creditors voluntary liquidations (otherwise known as CVLs) 2. 110 administrations 66 compulsory liquidations (these are predictably low) ● 1. 15 company voluntary arrangements (CVAs) 2. 1 Receivership appointment The majority of the measures put in place throughout the pandemic came to an end in September 2021. This subsequently meant that organisations had to begin paying their staff in full once again and the debt incurred before insolvency went back to normal levels. The only measure that continued following September surrounded the winding up of companies, but even that reverted back to normal in March 2022.

  2. The removal of covid measures has led to a record number of corporate insolvencies. These are at their highest peak since records began all the way back in 1960. It is not surprising, given that even though measures have been removed and restrictions have dropped, we still find ourselves in a serious state of economic hardship as the buying habits of consumers have changed and energy bills and the cost of living continue to rise too. Banks have started to ask for repayments on different loans that were made and backed by the government, and a lot of businesses simply aren’t in a strong enough financial position to pay them back.

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