Figures released today by the insolvency service have shown that the number of people being declared insolvent has risen for the first time in a year.
19,683 people in England and Wales were made insolvent in the third quarter of 2015 which is up 2.8% from the previous 3 months but down 19.5% on the same quarter in 2014.
But the good news is that for 2015 it is likely that personal insolvencies will total just short of 80,000 which is around 20,000 less formal insolvencies for individuals than in 2014.
The Insolvency service figures also showed that a rise in insolvencies was driven by an increase in the number of Individual Voluntary Arrangements (IVA’s)approved. An IVA is typically a formal deal with your creditors which can allow you to repay as much of your debt as you can afford over an agreed time (usually 5 years). After this time any remaining debt will be written off.
The number of people being made bankrupt has fallen to 3,857 in the third quarter of 2015 which is the lowest in 25 years. This means that for 2015 we are likely to see a total of just under 16,000 people being made bankrupt. In 2009 this figure was 73,000. The decline in bankruptcies is partly due to the costs of making yourself bankrupt which is currently £705. Also because there is now a “lite bankruptcy” procedure – a Debt Relief Order “DRO” which only costs £90 to access, many more people are going down this route especially as the limit on debts for a DRO has increased from £15,000 to £20,000.
According to Bev Budsworth, MD of The Debt Advisor, “regulation by the Financial Conduct Authority “FCA” of the debt solutions industry has seen less compliant businesses exiting the market and their customers have been able to access appropriate advice. IVA’s, bankruptcies and Debt Relief Orders offer an end to years of struggling with unaffordable debt.
If you are languishing on a debt management plan with no end in sight, you should get impartial advice from FCA regulated practices that can advise on all solutions.
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). We are also a member of the Debt Resolution Forum here to their codes and standards. Our offices are open until 8.00 pm Monday to Thursday, Friday until 5.30 pm and Saturdays from 9.00 am to 1.00 pm. Call 03339999654.