Statistics released by the Insolvency Service today show that in 2015, there were a total of 79,965 personal insolvencies, the lowest seen since 2005.
The figures released today show that in the fourth quarter of 2015, there were 19,950 personal insolvencies, 6,501 Debt Relief Orders (DROs) a 16 per cent increase compared to the previous quarter, 9,920 Individual Voluntary Arrangement’s (IVAs) and 3,529 Bankruptcies.
Mark Sands, Personal Insolvency Partner at RSM said:
‘As the data from our early warning Tracker service suggested, the fourth quarter of 2015 saw a sharp rise in Debt Relief Orders (DRO’s). We know this is down to changes in legislation which have seen the criteria opening up to those with debts of up to £20,000 instead of the previous upper limit of £15,000, and those with up to £1000 worth of assets instead of £300.
‘The increased accessibility of DROs combined with a shift in attitudes amongst creditors – more widely accepting unofficial payment plans - has seen an overall reduction in the more severe procedures like bankruptcies and overall the lowest levels of personal insolvency we’ve seen since 2005.
‘However, there is still an underlying debt problem for a large number of households which is masked by the continued fall in personal insolvency numbers. I would advise anyone experiencing financial difficulties, or those who feel they cannot cope with potential loss of overtime or an increase in base rates to speak to creditors and authorised debt advisors at the earliest opportunity.’