Today’s personal insolvency figures, released by the Insolvency Service, show that bankruptcies fell, year on year, by nearly a third (28%) whilst Individual Voluntary Arrangements remained stable, growing by 4.5% between Q4 2010 and Q4 2011.
Commenting, Andrew Smith, director of external affairs at debt resolution company, ClearDebt, said:
People are reducing debt at the moment and many are unable to enter a scheme like an IVA because they are unemployed. So, in a year where personal insolvencies have shrunk by nearly 6%, it seems suprising that IVAs have grown slightly: We believe this is because IVAs are now being arranged at much lower levels of debt than formerly. It used to be that an IVA was impossible to do for someone who owed less than £15,000. Now we understand half of the top ten IVA companies arrange IVAs for people with unsecured debts of £10,000. ClearDebt regularly puts them in place for people who owe down to £8,000.
We believe that IVAs are now eating into the market formerly taken by informal debt management plans – although there is evidence that these are growing too, and at lower debt levels.
For further comment on the insolvency statistics please contact either:
Andrew Smith – Andrew.Smith@cleardebt.co.uk, 0161 968 6825, 0791 240 7532
or
Sally Hardiman – Sally.Hardiman@cleardebt.co.uk 0161 968 6815
