Personal insolvencies fall despite the recession
The number of personal insolvencies in England and Wales fell to 27,390 in the second quarter of 2012, a year-on-year fall of 10.2 per cent and the lowest figure since 2008.
The 2012 second quarter figures, released by the Insolvency Service today, are an improvement on those for the first quarter when the number of people declared bankrupt increased for the first time in a year.
Bankruptcies are now at their lowest level since 2003, with 8,088 bankruptcy orders made in the 2012 second quarter, a fall of 27 per cent from the 2011 second quarter.
The decline in bankruptcies follows the introduction of debt relief orders in 2009.
Debt relief orders (DROs) are granted by the Insolvency Service and offers a cheaper option to going bankrupt for people on a low income with debts of less than £15,000.
The second quarter figures show that the number of DROs reached 7,956, an increase of 10 per cent compared with a year ago.
This means they have now reached a similar level to bankruptcies for the first time.
The number of Individual voluntary arrangements (IVAs) in the second quarter fell by 7 per cent year year-on-year to 11,346.
Earlier this week RSM Tenon reported a rise in the number of women being declared bankrupt.
The number of women becoming insolvent has increased by 7 per cent in the past four years.
There are now an equal number of men and women among the 420 people who become insolvent every working day, the firm said.
In the under-35 age bracket they have overtaken men, with women of this age accounting for 28% of all insolvencies, compared with 18% of men in this age group.
Mark Sands, RSM Tenon’s head of personal insolvency, says: “This could be the result of a number of things including the effects of the public sector cuts who employ a large number of female staff and an increase in women obtaining credit earlier in their careers only to see their debt levels spiralling out of control.”