The number of people entering personal insolvency debt solutions in England & Wales has fallen to the lowest level for 10 years.
Between April and June 18,866 individuals were declared insolvent, down 29.3% from the same period last year, according to the Insolvency Service. There were 26,668 insolvencies during the same quarter in 2014.
Personal Insolvency Breakdown
- Bankruptcy: 3,944 people were declared insolvent via bankruptcy orders, the lowest since 1990. This is also 27.9% down on the same period last year.
- Debt Relief Order: Also a form of bankruptcy, but an easier and cheaper version, DRO’s fell 16.8% for last year to 5,832.
- IVA: Short for Individual Voluntary Arrangement, IVA’s fell 36% on last year to 9,090.
Debt Support Trust charity trustee, Stuart Carmichael said:
“It’s fantastic news to see people dealing with their debt without relying on insolvency solutions”
However Mr Carmichael highlighted the risk of the figures again in the near future:
“Credit lending has increase according to recent figures and consequently it’s expected insolvency figures will be on the rise again shortly”
Financial commentators have also warned an interest rate rise from the Bank of England could put pressure on personal finance.
New government changes to bankruptcy, due to come into effect from Autumn, will mean creditors cannot declare a debtor bankrupt for less than £5,000. This could further reduce the number of people entering this form of insolvency.
Matthew Chadwick at accountants BDO LLP said this will mean a short term in increase in bankruptcies from June:
“Long term, this will mean only individuals with higher levels of debt will be made bankrupt, but short-term there may be a rush by creditors to make bankruptcy orders before the October cut-off.”
Get Insolvency Advice
If you are considering entering an insolvency debt solution it’s important to get professional debt advice.
Call Debt Support Trust on 0800 085 0226 and speak to one of our advisers today who can explain the best way to resolve your debt problem.