The number of individual voluntary arrangements (IVAs) and other forms of insolvency only dipped by a little in the three months to May 2011, the Bank…
The number of individual voluntary arrangements (IVAs) and other forms of insolvency only dipped by a little in the three months to May 2011, the Bank of England said.
In its latest quarterly Trends in Lending report, the Bank stated: "The write-off rate on consumer credit fell in 2011 Q1 for the third consecutive quarter, though remained high
and the rate of personal insolvencies in England and Wales fell slightly, following a sharp fall in the previous quarter."
It added: "Some major UK lenders reported that these indicators had moved broadly in line with their expectations and expected them to be stable for the rest of the year."
What this means is that there is still a substantial amount of money being written off by lenders and while the overall numbers may have dipped, many of these instances might have arisen from personal insolvencies.
For those seeking IVAs, the way this can reduce the amount owed is through a deal that sees creditors accepting smaller repayments, with interest frozen and everything remaining being written off at the end of the IVA payments period, which can be no more than five years.
For this to be established, it needs three quarters of those owed money to agree to the proposed deal.
Instances of money being written off include many bank loans, with figures from Credit Action for June showing £20.71 million is written off by banks and building societies from these every day.
This added up to £9.5 billion in the 12 months to the end of the first quarter of 2011.
By James Francis