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Tackling your debts

The different causes of bankruptcy and insolvency for men and women

Posted 26 June 2016 by Christine Walsh

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There are different reasons why men and women find themselves going through bankruptcy and insolvency. Learn the facts here.

A big part of tackling debt problems is identifying what causes people to start struggling with their repayments in the first place. Debt Advisory Centre has already looked at the root causes of problem debt, and now a new report looks at the different reasons men and women go bankrupt. 

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What the report told us

The Insolvency Trade body R3 produced the report, and it reveals that there is in fact a difference in men and women when it comes to bankruptcy. 

For men, the most common reason is losing their job or their business failing, whereas for women the top reason is the breakup of a relationship. A breakup of a relationship was only the 8th most common reason amongst male bankrupts. Other than that, the top reason for both men and women was living beyond their means, or more simply put, over-spending. 

The figures show that men are more likely to find themselves bankrupt because of a negative change in circumstances relating to their work, whereas women are more likely to become bankrupt because of a change in their personal life. This could show that the traditional gender roles in society and in the economy are still having an effect on why someone might find themselves going through bankruptcy. 

When you break the numbers down between men and women, men are still more likely to go bankrupt than women. But when you look at the single reason for bankruptcy, relationship breakdown causing a woman’s bankruptcy was the most common type. Of the 20,336 bankruptcies in 2014, 1,420 involved a woman whose relationship had come to an end. 

Is there a difference with insolvency? 

The numbers change when you look at insolvencies in general, however. Overall, there were 98,338 insolvencies in 2014 with 51,473 involving a women, so women have overtaken men in this area. This may be due in part to the fact it’s far more likely that women will start a Debt Relief Order (DRO). A DRO is a cheaper way to enter into bankruptcy and is designed for people with a low amount of money to put towards their debts and low assets. 

This shows that the fact that more women are becoming insolvent could be linked in part to their lower levels of assets and/or incomes, rather than because they have simply overspent. 

The report from R3 supports the research that Debt Advisory Centre has done into women and debt. We found that women may struggle to pay off their debts because they are more likely to work part-time, do most of the childcare and typically earn less than men. We also found that women are more likely to be struggling with money if they are single mums, which supports the idea that splitting from a partner can be the root cause of some women’s debt problems. 

There is help available

Whether you’re a man or woman and no matter how your debt problems began, there is debt help available. 

Both bankruptcies and DROs belong to a family of debt solutions that can help people with debts they can’t manage. Which debt solution is right for you depends on your particular situation, and which part of the country you live in, For example, if you have few assets and live in Scotland, then Minimal Assets Process (MAP) is a similar solution to a DRO that might help. 

You’ll find lots of impartial help on all aspects of money management at the Money Advice Service. Our advisors here at Debt Advisory Centre are specially trained debt experts and ready to help anyone struggling. They’ll look at your situation in detail and can tell you which debt solution is right for you, if any. You can get in touch with us using the options to the left if you think you need help dealing with debt. 

 

 

by Christine Walsh

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.