Insolvencies hit four-year low

 

Personal insolvencies have fallen to a four-year low, despite the toughening economy, official figures showed today.

Within these figures, bankruptcies are at their lowest since 2003, with 8,088 bankruptcy orders made in the second quarter of this year, representing a 27% drop on a year ago, the Insolvency Service report showed.

The service said that bankruptcy numbers have been affected by the introduction of debt relief orders (DROs), which have risen to reach a similar level to bankruptcies for the first time.

DROs, which were introduced in 2009 and are often dubbed "bankruptcy light", reached a new high in the second quarter of this year at 7,956, an increase of almost 10% on a year ago.

Overall, there were 27,390 personal insolvencies in England and Wales in the second quarter of this year, a 10% decrease on the same period a year ago and the lowest figure since the summer of 2008.

Individual voluntary arrangements (IVAs), which are also included in the figures, were down nearly 7% year-on-year to 11,346. Bankruptcy numbers have now been lower than IVAs for more than a year.

Analysts have said the official figures are the tip of the iceberg for people struggling with debt, with an estimated six million households living on the edge.

Household budgets have come under intense pressure from high living costs, rising unemployment and below-inflation wage rises, although there are some signs of improvement as inflation eases off.

Debt charity the Consumer Credit Counselling Service (CCCS) warned that millions of households remain "financially vulnerable".

Delroy Corinaldi, CCCS external affairs director, said: "Insolvency is a very difficult thing to have to face and it is usually at the end of a long struggle of trying to deal with debt.

"The fact that almost 30,000 people had to do this during April, May and June this year is staggering and highlights just how many households need help with their debt problems.

"It underlines why those who do find themselves in this situation need to be able to access free, independent and expert advice as soon as they begin to struggle with their debt."

DROs are a formal process aimed at people who have more modest levels of debt but no realistic prospect of paying it off and the maximum allowable debt is £15,000.

IVAs involve an agreement between someone who is struggling and their creditors that they will pay their debts to a specialist who will share the money out between creditors.

Today's figures also showed that there were 4,115 company liquidations in the second quarter of 2012, a 2.4% drop on a year ago.

PA

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA celebration of British elections
  • Get to the point
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.

iJobs Job Widget
iJobs General

Ashdown Group: Marketing Manager (B2B) - Romford - £40,000 + car

£35000 - £40000 per annum + car and benefits: Ashdown Group: Marketing Manager...

Ashdown Group: Helpdesk Analyst - Devon - £20,000

£18000 - £20000 per annum: Ashdown Group: Helpdesk Analyst - Devon - £20,000 ...

Ashdown Group: Data Scientist - London - £50,000 + bonus

£35000 - £50000 per annum + generous bonus: Ashdown Group: Business Analytics ...

Ashdown Group: IT Project Coordinator (Software Development) - Kingston

£45000 - £50000 per annum: Ashdown Group: IT Project Coordinator (Software Dev...

Day In a Page

General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

'We will not sit down with Nicola Sturgeon'

In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

How ordinary Britons celebrated VE Day

Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
They came in with William Caxton's printing press, but typefaces still matter in the digital age

Typefaces still matter in the digital age

A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

'Missing link' between Earth's two life-forms found

New microbial species tells us something about our dark past, say scientists
The Pan Am Experience is a 'flight' back to the 1970s that never takes off - at least, not literally

Pan Am Experience: A 'flight' back to the 70s

Tim Walker checks in and checks out a four-hour journey with a difference
Humans aren't alone in indulging in politics - it's everywhere in the animal world

Humans aren't alone in indulging in politics

Voting, mutual back-scratching, coups and charismatic leaders - it's everywhere in the animal world
Crisp sales are in decline - but this tasty trivia might tempt back the turncoats

Crisp sales are in decline

As a nation we're filling up on popcorn and pitta chips and forsaking their potato-based predecessors
Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

Ronald McDonald the muse

A new wave of artists is taking inspiration from the fast food chain
13 best picnic blankets

13 best picnic blankets

Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
Barcelona 3 Bayern Munich 0 player ratings: Lionel Messi scores twice - but does he score highest in our ratings?

Barcelona vs Bayern Munich player ratings

Lionel Messi scores twice - but does he score highest in our ratings?
Martin Guptill: Explosive New Zealand batsman who sets the range for Kiwis' big guns

Explosive batsman who sets the range for Kiwis' big guns

Martin Guptill has smashed early runs for Derbyshire and tells Richard Edwards to expect more from the 'freakish' Brendon McCullum and his buoyant team during their tour of England
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'