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Personal Insolvencies see a 10% increase in Q2 2016

Published on:August 1, 2016Author:Andrew Steele

Figures published today by the Insolvency Service show that there have been an increase in the overall number of personal insolvencies for the 2nd quarter of 2016. The numbers of personal insolvency increased from 20,382 for the 1st quarter of 2016 to 22,503 in the quarter ending June 2016.

June Quarter Personal Insolvencies

Type of Procedure 1st quarter 2016 2nd quarter 2016 Movement
Individual Voluntary Arrangement “IVA’s” 9,916 12,225 20.85% ▲
Bankruptcies 3,744 2,537 38.43% ▼
Debt Relief Orders “DRO’s” 6,722 6,741 0.28% ▲
Total Numbers 20,382 22,503 9.89 ▲

Bev Budsworth, Managing Director of The Debt Advisor Ltd adds, “It comes as no surprise that IVA numbers have increased. This is the result of a number of companies exiting the market.”

A review conducted by the FCA between June 2014 and May 2015 of both fee-charging and free-to-customer debt management firms found that although many firms had made an effort to improve their practices, there was poor practice by some fee charging debt management companies and room for improvement by the free sector.

The exit from the industry which includes companies such as Personal Debt Helpline who had 16,000 customers has meant that many thousands of debt management customers have found themselves without a solution. Many of these customers should have been offered IVA’s and it would appear that they now have access to appropriate advice. Bev Budsworth adds, “I expect the numbers of IVA’s will continue to increase during the next few quarters as more liberated debt management customers get access to IVA’s. An IVA will permit them to write off debt they cannot afford once their IVA is successfully completed.

June Quarter Corporate Insolvencies

In contrast the insolvency number for company insolvencies have declined by around 2% on the March 2016 quarter as highlighted below.

Type of Procedure 1st quarter 2016 2nd quarter 2016 Movement
Compulsory Liquidations 804 662 19.37% ▼
Creditors Voluntary Liquidations “CVL’s” 2,515 2,501 0.55% ▼
Administrations 301 340 12.16% ▲
Company Voluntary Arrangements “CVA’s” 75 115 42.10% ▲
Total Numbers 3,695 3,618 2.10% ▼

The Debt Advisor Ltd incorporates The Business Debt Advisor (TBDA) which specialises in helping businesses struggling with debt issues. Laura Walshe head of TBDA adds, “We are seeing an increase in the number of enquiries from company directors. The reasons appear to be varied but do include loss of turnover cause by customers holding back on orders as a result of the uncertainty caused by Brexit.” Laura adds “Companies need to drive performance on a daily basis and maximise opportunities which arise as others dither.”

If you or your business is struggling with financial difficulties, feel free to give our teams a call.

The Debt Advisor 0800 0851 825
The Business Debt Advisor 0800 7810 990

There a range of solutions depending on whether you are salaried or self employed or you are a director or shareholder of a limited company. If you would like our team to call you, please use our contact form.

All debt solutions need to be carefully considered. IVA’s are formal solutions and failure to keep to the terms can result in your IVA failing and you could end up bankrupt.

There is also free debt help and advice available through a variety of debt charities. For more information, we recommend you visit www.moneyadviceservice.org.uk.

The Debt Advisor is authorised and regulated by The Financial Conduct Authority (reg no: 606669).