Personal bankruptcies fall to lowest level in five years

Official figures show drop of 27 per cent compared to this time last year

Personal bankruptcies have fallen to their lowest level for five years.

Official figures released by the Insolvency Service show that the number of people going bust in the first three months of the year fell to 6,663.

That’s a drop of 27 per cent compared to the same period 12 months ago.

Meanwhile personal insolvencies – which include debt relief orders and individual voluntary arrangements -dropped to their lowest level in five year.

There were 25,006 across England and Wales between January and March 2013, 12.9 per cent less than in the first three months of 2012.

But debt charities warned that the figures mask the real financial difficulties hitting millions of hard-up householders.

Delroy Corinaldi of Step Change said: “The declining levels of personal insolvency suggest that large debt levels may be declining. However, we know that the pattern of debt is beginning to change, as households are increasingly falling behind on priority living costs such as council tax, energy bills and rent.”

Joanna of the Money Advice Trust, warned that many people couldn’t actually afford to go bankrupt. “Getting the £700 - £525 for the deposit plus £175 for the court fee - together to petition for bankruptcy is not easy for people already struggling with debts. The result is that people are often left to drift in a financial black hole where they can’t afford to repay their debts, can’t afford bankruptcy, and have no other way out.”

Her view was backed up by Charles Turner of the Insolvency Practitioners Association. “Bankruptcies are an expensive bureaucratic process which provide poor returns for creditors and so are less favoured as a solution.”

He said he has seen evidence that debt management plans, which are not included in the figures because they are an informal process, have “grown significantly”, because they are seen as more cost-effective.

Meanwhile company failures also fell to their lowest level in five years, despite high profile flops such as HMV, Jessops and Republic.

Liquidations in England and Wales fell 15.8 per cent over the year to 3,619 in the first quarter. That was 5.3 per cent lower than the last three months of 2012.

But Stewart Baird of Stone Ventures, said: “There is something artificial about the current liquidation rate and I suspect we may see corporate insolvencies start to rise again at some point.”

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Guru Careers: Software Developer / C# Developer

    £40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

    Neil Pavier: Management Accountant

    £45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

    Sheridan Maine: Commercial Accountant

    £45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

    Laura Norton: Project Accountant

    £50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

    Day In a Page

    Abuse - and the hell that came afterwards

    Abuse - and the hell that follows

    James Rhodes on the extraordinary legal battle to publish his memoir
    Why we need a 'tranquility map' of England, according to campaigners

    It's oh so quiet!

    The case for a 'tranquility map' of England
    'Timeless fashion': It may be a paradox, but the industry loves it

    'Timeless fashion'

    It may be a paradox, but the industry loves it
    If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

    Could have done with Osama bin Laden staying alive?

    Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
    New exhibition celebrates the evolution of swimwear

    Evolution of swimwear

    From bathing dresses in the twenties to modern bikinis
    Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

    Sun, sex and an anthropological study

    One academic’s summer of hell in Magaluf
    From Shakespeare to Rising Damp... to Vicious

    Frances de la Tour's 50-year triumph

    'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
    'That Whitsun, I was late getting away...'

    Ian McMillan on the Whitsun Weddings

    This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
    Kathryn Williams explores the works and influences of Sylvia Plath in a new light

    Songs from the bell jar

    Kathryn Williams explores the works and influences of Sylvia Plath
    How one man's day in high heels showed him that Cannes must change its 'no flats' policy

    One man's day in high heels

    ...showed him that Cannes must change its 'flats' policy
    Is a quiet crusade to reform executive pay bearing fruit?

    Is a quiet crusade to reform executive pay bearing fruit?

    Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
    The King David Hotel gives precious work to Palestinians - unless peace talks are on

    King David Hotel: Palestinians not included

    The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
    More people moving from Australia to New Zealand than in the other direction for first time in 24 years

    End of the Aussie brain drain

    More people moving from Australia to New Zealand than in the other direction for first time in 24 years
    Meditation is touted as a cure for mental instability but can it actually be bad for you?

    Can meditation be bad for you?

    Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
    Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

    Australia's first-ever Eurovision entrant

    Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine