This site uses cookies; by continuing to use our site you agree to our use of cookies. More details in our privacy policy. Close

 

 

Personal insolvency decrease to continue 6 February 2014

The level of personal insolvency in the UK is expected to have decreased in Q4 2013, according to research released ahead of tomorrow’s official statistics from The Insolvency Service.

Figures from Baker Tilly estimate that personal insolvencies fell slightly in Q4 2013 compared to the same period in 2012, dropping to an expected total of 25,000.

This would see the total personal insolvency level for 2013 falling to its lowest figure since 2005.

Individual Voluntary Arrangements (IVA) accounted for 52% of personal insolvencies (12,900), while Debt Relief Orders (DROs) and bankruptcies accounted for 26% (6,600) and 22% (5,500) respectively.

Mark Sands, personal insolvency practitioner at Baker Tilly, said: “Our latest estimates indicate that personal insolvency levels in the last quarter of 2013 continued their downward trend, although the decline appears to be slowing and 2013 may be remembered as the year when personal insolvencies plateaued and reached their new normal.

“The fact that we are now seeing the lowest level of personal insolvencies for eight years is a welcome sign that many people have recovered from excessive debts accumulated prior to the recession.

“However, with the recovering economy, increased levels of consumer confidence and record low interest rates, there is a danger that some may be tempted to over extend themselves again.”

Research compiled by Mazars National Bankruptcy Centre confirms the fall in personal insolvency levels, estimating an annual total of 99,200 personal insolvencies, down from a total of 109,500 in 2012 and 120,000 in 2011.

The personal insolvency total for 2013 is broken down into 25,000 bankruptcies, 27,700 DROs and 46,500 IVAs.

While both bankruptcy and DRO levels decreased year on year, IVA figures have stayed flat.

Paul Rouse, head of Mazars National Creditor Services, said: “IVA numbers in 2013 are expected to remain at a steady rate per annum of about 45,000 – 48,000.

“That market seems to have settled down, with improving approval rates and decreasing failure rates year on year, as tighter protocols and controls take effect.”

See also:

 

 

blog comments powered by Disqus