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New stats from the Insolvency Service show a rise in the number of IVAs over the third quarter of this year.
If you are insolvent, it means that you can’t pay your debts when they are due or that your debts are worth more than your assets. The latest stats from the Insolvency Service show there has been a rise in the number of personal insolvencies from July to September in 2017.
More people have started IVAs
Overall insolvencies increased in the third quarter of the year and this was mainly driven by an increase in the number of IVAs. An Individual Voluntary Arrangement is one way to deal with being insolvent and is a formal debt solution that allows people to pay back their unsecured debts at an affordable rate over a fixed time period.
There were 25,479 individual insolvencies in the third quarter of this year and 15,523 of them were IVAs – that’s over 60%. 6,274 were Debt Relief Orders and 3,682 were bankruptcies.
These numbers mean that insolvencies were 10% higher in the third quarter than they were in the previous one and 8% higher when compared to the same quarter in 2016.
What else did we learn?
While IVAs were on the rise, the number of bankruptcies fell overall, by over 5% compared to the previous year. DROs increased slightly from the previous quarter but fell by 3.3% compared to the same quarter last year.
Altogether, the rate of insolvency was 21.0 per 10,000 adults in the 12 months ending with quarter three of 2017. This is the highest it’s been since 2014.
Dealing with debt
IVAs, DROs and bankruptcy are all ways to deal with insolvency but there are other ways of dealing with debt, for instance by contacting your lenders yourself and arranging a new, affordable payment plan, or by starting a Debt Management Plan (DMP) which is an informal debt solution.
All debt solutions either allow you to lower your debt repayments, or suspend them altogether, if you can’t afford to put anything towards your debts. It’s also important to remember that all debt solutions will have a negative effect on your credit rating, which means it may be more difficult or more expensive for you to borrow money in the future.
Before you go ahead with any plan to deal with your debts, you need to know which solution is right for you. The best way to do this is to speak to a trained debt advisor about your particular circumstances and get a recommendation from them.
You can contact one of our advisors using the options at the top of the page and they will be able to tell you which solution is best for you. Alternatively, the Money Advice Service offers lots of free and impartial money advice.
by Christine WalshBack to blog home