The number of personal insolvencies declined by 15.5 per cent in England and Wales in the first quarter of this year, compared to the same period last year.
The number of people being declaring insolvent has fallen dramatically and is now at levels seen before the credit crunch.
This is mostly down to sharp and welcome falls in the number of bankruptcies – down over 30 per cent compared to last year, although those with severe personal finance problems may be seeking other types of debt remedies as Steve Rees, Managing Director of debt consultant Vincent Bond & Co explains:
“It is clear that debtors are now turning to Debt Relief Orders, which were up 20.3% on the corresponding quarter of the previous year. IVA’s were also proportionally more popular, with a decline of 8%, which is more closely in line with the overall 15% decline.”
“I predict that the extra flexibility offered by a DRO will continue to be popular, and that the the stringent (and public) demands of a bankruptcy (as well as its associated stigma), will continue to drive a decline in this route out of financial distress.”
Other experts point to a shift in consumer spending habits in which shoppers are reining back on unnecessary expenditure and tightening their belts with household costs.
The encouraging personal insolvency figures contrast with the latest company insolvency statistics which have increased, supporting “the theory of a possible double dip in the overall UK economy, and is an alarming turn around in what had previously been a positive declining trend.”, Steve Rees added.