January 2021 was the Lowest Month on Record for New Insolvencies
The ASIC insolvency appointment statistics have just been updated, and January 2021 was the lowest month for new corporate insolvency appointments since records started in 1998.
There were 192 new appointments in January, made up of 134 Creditors wind-ups, 25 Voluntary Administrations, 18 Receiver manager appointments, 9 Controllers and 6 Court wind-ups.
The previous record low was January 1998 (the first month on record) with 217 appointments. January 2021’s 192 is a 12% decrease from the previous record, and the first time on record monthly insolvency numbers have dipped below 200 appointments in a month.
January 2021 is down 52% on the previous January (397), and 58% on the previous month (462).
January is traditionally the slowest month for corporate insolvencies, mostly because the courts are closed which keeps the number of court wind-ups to a minimum.
January 2021 being the slowest on record comes as a surprise because the month also marks the removal of the Insolvent Trading moratorium, the change back to 21 day statutory demands (from 6 months) to allow court liquidations and the introduction of the new small business insolvency processes. Many predicted January to be the start of a large wave of new insolvency appointments for these reasons. We think the wave may start when JobKeeper payments end in April 2021, but even then it may not arrive in full until the ATO start pursuing unpaid tax in earnest.