You are here: Home - Credit Cards & Loans - News -

Personal insolvencies reach seven-year high

0
Written by:
29/01/2019
The number of people declared insolvent reached a seven-year high in 2018, according to figures.

There were 115,299 personal insolvencies in England and Wales last year, a 16.2% rise on 2017 and the highest annual level since 2011, statistics from the Insolvency Service reveal.

This was primarily driven by increases in individual voluntary arrangements (IVAs) which reached their highest annual total on record. There were 71,034 IVAs in 2018, an increase of 19.9% on 2017.

Bankruptcies also went up by 9.8% to 16,582.

Richard Haymes, head of financial difficulties at TDX Group, said: “We expect insolvencies to remain at this high rate throughout 2019 and 2020, fuelled by high consumer lending and the forceful marketing of companies offering personal insolvency as a debt management solution.”

Research by TDX Group found widespread confusion over the consequences of personal insolvency.

Nearly three in ten people polled did not realise that entering personal insolvency could affect their access to rental accommodation, while over a quarter (26%) of people didn’t know it may affect their eligibility for a bank account. Nearly one in five (19%) incorrectly thought it wouldn’t influence their ability to access a mortgage.

Types of insolvency explained

Bankruptcy 

This is a form of debt relief available for anyone who can’t pay their debts. Assets owned are sold and the proceeds distributed to creditors. You could end up having to sell your home or car.

Debt relief orders (DROs)

These are a form of debt relief available to those who have a low income, low assets and less than £20,000 of debt. If your DRO is approved, your debt payments are put on hold for 12 months. If after the 12 months your circumstances haven’t improved, your debts are written off.

Individual voluntary arrangements (IVAs)

These are voluntary way of repaying creditors some or all of what they are owed. Once approved by 75% or more of creditors, the arrangement is binding on all. IVAs are supervised by licensed Insolvency Practitioners. All individuals entering these procedures are listed on the Individual Insolvency Register, and remain on the list until three months after their insolvency ends.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Getting a mortgage now easier for older borrowers

Borrowers who will be aged 84 when their mortgage term ends can now choose from more than 1,000 deals, analysis...

Close