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Massive and increasing losses for unsecured and uninsured creditors in H2 2016

Massive and increasing losses for unsecured and uninsured creditors in H2 2016

According to recent insolvency statistics from Infolink, total unpaid/unsecured credit losses totaled over £1.9 billion for the second half of the year, up 6% on the first half of the year. 80,000 ordinary unpaid trade creditors (excluding 8,000 occurrences of HMRC as creditors) lost an average of £23,900, from 5,178 insolvencies. The average asset shortfall for unsecured creditors in each Insolvency was approximately £499,000.

At least 20% of the unpaid creditors don’t have sufficient financial reserves to stand the losses they are incurring; almost 10% of the unpaid creditors are themselves insolvent and 15% have a working capital deficit.

With only 10% of unsecured creditor losses covered by a trade credit insurance policy and 20% of unsecured creditors not having the financial reserves to stand the trade credit losses, it is hardly surprising that unsecured creditors are more than 3 times as likely to enter insolvency proceeding themselves, when compared to rest of the business universe.

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