Figures released today by the Insolvency Service show that the total decreased by 2.6 per cent on the first quarter of 2010, although the number of debt relief orders (DROs) rocketed up to 6,295, a rise of 218 per cent on 1,978 for the same period in 2009.
The rest of the total personal insolvency figure consisted of 13,466 individual voluntary arrangements (IVAs), an increase of 10.2 per cent on the corresponding quarter in 2009, and 14,982 bankruptcies, representing a decrease of 20.6 per cent on the corresponding quarter of 2009.
The level of UK personal debt is now around £1.46 trillion with the average adult owing just under £30,000 inclusive of mortgage, or 127 per cent of their average earnings.
Bev Budsworth, managing director of The Debt Advisor, said: “The coalition’s cuts are really beginning to bite and we are starting to see the effects on ordinary people.”
She added: “Not only does indebtedness have a crippling effect on individuals, it also has serious implications on the country’s finances. Therefore, it’s essential that we ‘recycle’ these people, getting them back on track and making a positive contribution to the economy by paying off their debts.
“We need a common sense approach to this issue, what we don’t need is endless government strategy ‘re-thinks’ that are in danger of undoing what has taken government working parties, the Insolvency Practitioners Association (IPA), the IVA Standing Committee, the Ministry of Justice (MoJ) and the Office of Fair Trading (OFT), nearly seven years to achieve.”