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Insolvency numbers fall again

According to a recent report the number of people that are being declared insolvent has fallen. Figures fell in insolvency numbers across England and Wales.

The reduction in figures during the third quarter reflects a drop of 3% on the previous quarter's figures, and a drop of 5% in figures during the same period last year. The drop now takes insolvency figures down to 26,072, which is welcoming news amidst the turmoil that has recently hit the finance markets coupled with high bad debt levels.

In a breakdown the report showed that IVAs, or Individual Voluntary Arrangements, had fallen by 4.3% to 10,239. The level of bankruptcies fell by 2.1% to 15,833. There has also been a fall in the number of repossession orders made by courts during the third quarter, with a fall of 1% across England and Wales. The total number of repossession orders has fallen to 23,806 over the past three month period.

The figures relating to the number of people being declared insolvent has fallen for the third quarter in a row, and this is the first time in five years that these figures have fallen year on year. According to one industry official the figures show that borrowing on credit cards has fallen. He stated: "There has been a fall for the last couple of years, so the insolvency figures have levelled off."

The level of IVAs in England and Wales are now 14% lower than they were a year ago. However, the level of bankruptcies has risen by 2.2% in that period.

One official stated that this was because IVA firms were having to be more stringent about the cases that they take on, stating: "There has been considerable pressure on IVA specialists to be more fussy about the cases they take on. There have been examples of proposed IVAs that were inappropriate and for which the fees were too high."

Tom Smith
13th November 2007

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