Massive losses for uninsured creditors

Massive losses for uninsured creditors
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 percent 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 percent of the unpaid creditors don’t have sufficient financial reserves to stand the losses they are incurring; almost 10 percent of the unpaid creditors are themselves insolvent and 15 percent have a working capital deficit.
With only 10 percent of unsecured creditor losses covered by a trade credit insurance policy and 20 percent 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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