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Personal insolvencies in 15% annual fall 6 May 2011

There was a significant increase in the number of debt relief orders, which rose by just over a fifth to 6,788 compared to the first quarter of 2010.

Bev Budsworth, chief executive of The Debt Advisor, said: "Levels of personal insolvencies have been reducing throughout 2010 but I believe that we may be on the verge of seeing levels rise again to around 130,000 by the end of this year".

She added: "I feel it’s likely to get worse as the Government’s austerity measures, mostly introduced from April, begin to be felt in people’s wallets."

There were 12,539 bankruptcies in the first quarter of 2011, a decrease of 30 per cent on the same quarter the previous year.

Pat Boyden, partner in PwC’s insolvency team, said: "Although debt levels remain fairly high, this downward trend is being driven by the lack of available credit in the market and a fall in uncontrolled debt".

He added: "Evidence suggests that people are struggling more with their day to day financial pressures such as utility bills rather than their levels of existing debt."

Individual Voluntary Arrangements (IVAs) were down 8 per cent compared to last year with a total of 10,835 being arranged.

Budsworth said: "IVAs are down but are still a popular form of structured debt repayment which is largely due to the excellent co-operation between creditors and IVA practitioners, which has made the process more user-friendly and transparent."

 

 

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