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Personal insolvencies climb to record high

The number of people in England and Wales who were declared insolvent between October and December rose to 35,574, the highest level on record.

Figures from The Insolvency Service show that the number of individual insolvencies in Q4 has jumped 24.9% since the same period in 2008.

For the whole of 2009 there were 134,142 individual insolvencies in England and Wales, equating to approximately one in every 320 adults.

Last year’s number of personal insolvencies was up 25.9% from 2008, when there was approximately one insolvency in every 400 adults. 

The yearly figure was made up of 74,670 bankruptcies, 47,641 Individual Voluntary Arrangements, and 11,831 Debt Relief Orders.

DROs were introduced last April to provides an alternative route into personal insolvency for certain people.

They are available for people living in England and Wales who do not own their own home, have surplus income of less than £50 a month, assets other than possibly their car not exceeding £300, and less than £15,000 of debt.

DROs do not involve the courts but are instead run by The Insolvency Service in partnership with specialist debt advisers called approved intermediaries.

The Insolvency Services says it is impossible to calculate the number of those who had a DRO approved who would have been declared bankrupt had the DRO route not been available.

The number of businesses that have been liquidated fell on a quarterly basis, but showed a rise annually overall.

There were 4,566 compulsory liquidations and creditors’ voluntary liquidations in total in England and Wales in Q4, down1.7% on the three months and down 1.1% on the same period a year ago.

In total last year there were 19,077 compulsory liquidations and creditors’ voluntary liquidations, an increase of 22.8% on 2008.

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