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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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