Personal insolvencies at highest level in three years
The total number of personal insolvencies for the first three months of 2017 is the highest it’s been in almost three years. That’s according to the most recent stats from The Insolvency Service.
Between January and March 2017, a total of 24,531 people went insolvent. This is an increase of 6.7% from the last three months of 2016. The last time insolvencies were at this level was in the second quarter of 2014.
Let’s take a look at those figures in a bit more detail to see what’s behind the rise in personal insolvencies.
Why are personal insolvencies up?
A jump in the number of Individual Voluntary Arrangements (IVAs) looks to be the main reason for the insolvency increase. Some 14,539 people took out an IVA during the last three months, up 12.5% from the previous quarter. And in the last year, IVAs rose by 35.2%, continuing a trend that started in mid-2015.
In comparison, the number of Debt Relief Orders (DROs) actually fell slightly, by 2% in the last quarter to 6,119. This is the third quarter where DROs have fallen and they’re now at their lowest level since the eligibility criteria changed – this was in October 2015.
Bankruptcies rose by 1.3% in the last quarter and by 3% over the last 12 months, with 3,873 started. The reason for this increase was the launch of the online bankruptcy process in April 2016.
If you want to apply to go bankrupt, you can now do this yourself online – previously, you had to file a petition at court. The new process makes bankruptcy seem less daunting and more accessible, as you can do it from the comfort of your own home.
The bankruptcy fees increased in July 2016 to a total of £680. But with this increase also came the option to pay the fees in instalments. This could be another reason why bankruptcies are on the rise. Now, people don’t have to worry about finding the fees in one lump sum – paying in instalments can make it more affordable.
Getting help with debt
If you’re looking at an insolvency solution, it’s important that you don’t worry about this. Seeking help sooner rather than later means you can start getting your debts back under control as soon as possible.
If you’re currently worried about your finances, have unsecured debts from personal borrowing and would like to speak confidentially and free of charge to an advisor who can talk to you about the benefits and considerations of a range of debt solutions and personal insolvency solutions, then please get in touch by calling 0800 048 1764.
You can also visit www.HarringtonBrooks.co.uk to request a call back at a time to suit you. By requesting a call, you are under no obligation to use our services. Harrington Brooks provide solutions to customers living in England, Scotland, Northern Ireland and Wales.
Should you choose to undertake a plan or arrangement, there may be consequences to consider, including restrictions on future expenditure, lending and on your ability to obtain further or future credit. If you do choose one of our solutions then fees, terms and conditions apply. For further information and advice please visit www.HarringtonBrooks.co.uk.
The services that we provide may be available at no cost from other government and charity based providers. Further information can be obtained from the Money Advice Service at www.MoneyAdviceService.org.uk