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Tackling your debts

Bankruptcies fall to lowest level since 2002

Posted 03 May 2013

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Fewer people are entering insolvency these days. The last time the numbers were this low was back at the start of 2008.

Insolvency comes with its downs as well as its ups, but sometimes it really is the best way to sort your debts out. In every one of the last seven years, it's helped well over 100,000 people face up to debt problems they couldn't tackle any other way.

Latest figures just published

We get the latest figures from the Insolvency Service every three months, showing us how many people in the UK entered bankruptcy, an IVA, a Debt Relief Order or a Trust Deed in the latest quarter (three-month period).

So we've just seen the numbers for January-March (Q1) 2013.

Personal Insolvencies since 2003 - England and Wales

  Bankruptcies Debt Relief Orders (DROs) Individual Voluntary Arrangements (IVAs) Insolvencies (Total)
2003 28,021   7,583 35,604
2004 35,898   10,753 46,652
2005 47,291   20,293 67,584
2006 62,956   44,332 107,288
2007 64,480   42,165 106,645
2008 67,428   39,116 106,544
2009 74,670 11,831 47,641 134,142
2010 59,173 25,179 50,693 135,045
2011 41,876 29,009 49,056 119,941
2012 31,756 31,027 46,694 109,477
2013 (Q1 Only) 6,663 7,219 11,124 25,006

Source: The Insolvency Service

As you can see, insolvencies in England and Wales have been on the way down for a few years now. There was a serious 'spike' in 2009-2010, when Debt Relief Orders were introduced and people had to deal with the aftermath of the credit bubble.

But the numbers dropped by 15,000 in 2011, by another 10,000 the next year - and now they're falling even further. In fact, you'd have to look back to 2002 to find a quarter when fewer people were declared bankrupt.

Click here to find out more about Debt Relief Orders (DROs)

Lenders aren't lending so much these days - and borrowers are being careful about taking on any new debts. Looking ahead, our experts reckon insolvency numbers (particularly bankruptcies) will keep on falling for the foreseeable future.

Personal Insolvencies since 2003 - Northern Ireland

  Bankruptcies Debt Relief Orders (DROs) Individual Voluntary Arrangements (IVAs) Insolvencies (Total)
2003 513   318 835
2004 666   449 1,115
2005 821   633 1,454
2006 1,035   774 1,809
2007 898   440 1,338
2008 1,079   599 1,638
2009 1,236   722 1,958
2010 1,321   1,002 2,323
2011 1,615 112 1,112 2,839
2012 1,453 506 1,231 3,190
2013 (Q1 Only) 328 119 389 836

Source: The Insolvency Service


DROs weren't introduced in Northern Ireland until 2011 - and that's one of the factors behind 2012's record high in personal insolvencies.

The biggest change at the start of 2013 was in IVAs. When you look at how few people enter insolvency in Northern Ireland, that 389 figure marks a serious increase - a jump of 39% on the last quarter. In all the time IVAs have been available in Northern Ireland, only one quarter has ever saw more people entering an IVA.

You could find out more about IVAs here.

Personal insolvencies since 2003 - Scotland

The Scottish statistics always look a bit different, because they're published by financial year (which runs from April to March in the following year). So they're always written like this:

  Bankruptcies Trust Deeds Insolvencies (Total)
2003/4 3,249 5,670 8,919
2004/5 3,485 6,144 9,629
2005/6 5,423 7,199 12,622
2006/7 5,885 8,298 14,183
2007/8 6,158 7,509 13,667
2008/9 14,777 7,633 22,410
2009/10 13,810 9,188 22,998
2010/11 11,443 7,980 19,423
2011/12 11,056 9,194 20,250
2012/13 8,814 8,177 16,991

Source: Accountant in Bankruptcy (AiB) - Scotland's Insolvency Service

So insolvencies in Scotland have been dropping since 2009/10. And now it looks like they're levelling off. It's a good sign - it looks like more Scots are dealing with their debts without needing to be declared insolvent.

One thing that's really helping struggling borrowers north of the border is DAS, the Debt Arrangement Scheme. You can find out more about DAS here.

Insolvency's not the only answer

Wherever you live in the UK, debt problems don't have to lead to insolvency. Speak to an expert before your debts get too bad and you might find there's a better way to get out of debt.

Talk to one of our experts and find out how we could help you. Just fill in the form on this page, or call us on 0161 605 4810.

by Sarah Symons

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