Small Drop In Personal Insolvencies Reported

Fri, 06 Aug 2010

New figures have revealed that the number of people in England and Wales being declared insolvent fell by 2.6 per cent during the second quarter of the year.

According to the latest data from the Insolvency Service, personal insolvencies dropped from 35,682 in the first quarter to 34,743 in the three months to June. However, the Q2 figure still represents a 5 per cent increase on the same period in 2009.

Of those declared insolvent, 14,982 people went bankrupt (down 20.6 per cent on the corresponding quarter last year) and 13,446 people took out an Individual Voluntary Arrangement (IVA) - up 10.2 per cent year-on-year.

There were also 6,295 Debt Relief Orders (DROs) granted in the spring months, up from 5,644 in the previous quarter.

The Insolvency Service data also revealed that the number of companies put into administration in the second quarter totalled 4,080 – a rise of 0.5 per cent on the revised figures for the first quarter of 2010, but a fall of almost 20 per cent on the corresponding figure last year.

Despite the quarterly fall in insolvencies, industry experts warned that severe job cuts in the public sector will drive more people into insolvency .

Steven Law, president of insolvency trade body, R3 added that the personal insolvency figures "are just the tip of the debt iceberg".

He said: "The true size of the UK's debt problem remains hidden as insolvency industry estimates there are an additional 500,000 people currently in informal debt management plans and close to a million people are struggling with their debts and have not yet sought help."
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