More chose to liquidate

2011-09-27 00:00

ALTHOUGH the number of liquidations increased by 24,3% year on year in August 2011 to 302 cases, the general declining trend in 2011 remains entrenched.

Statistics South Africa said yesterday that the increase was caused by a spike in the number of voluntary liquidations. “The biggest increase in the number of voluntary liquidations during this period was recorded in the financing, insurance, real estate and business services industry [52 more liquidations], followed by the community, social and personal services industry [24 more liquidations].”

The number of liquidations in the first eight months of 2011 decreased by 17,1% year on year.

Senior Manager: Portfolio Business at credit insurer Coface South Africa Paul Jooste told The Witness that the company is seeing a reduced volume and value of bad debt handovers, with debtors paying overdue amounts more timeously.

“It remains important to follow up on overdue accounts as quickly as possible as payment of the debt reduces substantially if [it is] 240 days past [the] due date,” Jooste said.

Jooste added that although private individuals and corporates are showing signs of financial wellbeing, a recent statistic released by the National Debt Mediation Association showing that the number of consumers with impaired credit records has risen by 174 000 to 8,9 million in the second quarter of 2011 is of concern.

Liquidation refers to the winding-up of the affairs of a company or CC when liabilities exceed assets — and it can be resolved by voluntary action or by an order of the court.

Insolvency refers to an individual or partnership which is unable to pay its debt and is placed under final sequestration. Civil judgements are decisions taken in a civil matter or a dispute between two people or parties while civil summonses are notices to appear before a court of law where a dispute between two parties or people has to be heard.

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