The latest Insolvency Statistics – July to September 2016 (Q3 2016) published by the Insolvency Service today show Individual Voluntary Arrangements (IVAs) increased for the fifth consecutive quarter. If growth continues at the same pace 2016 could see the highest number of IVAs ever, exceeding last year’s record of 52,190 – possibly by up to 10,000 cases.
In England and Wales the number of people becoming insolvent in Q3 2016 was 24,254, a 6% increase on the previous quarter and 19.3% higher than the same quarter in 2015.
This was comprised of 3,844 Bankruptcies, 6,490 Debt Relief Orders (DROs) and 13,917 IVAs. The increase in individual insolvencies was mainly due to the increase in IVAs, which increased 10.9% when compared with Q2 2016.
DROs decreased by 3.7% when compared with Q2 2016, which is mainly due to the change in eligibility criteria introduced in October 2015.
Bankruptcy orders were 7% higher than in Q2 2016 yet still 1.5% lower than in the same period in 2015. Debtor applications for bankruptcy increased by 12% with a fall of 3.7% in creditor petitions for bankruptcy. This is likely a result of the change in process introduced in April this year.
A staggering figure emerges where in the 12 months ending Q3 2016 1 in 515 adults became insolvent. This equates to 0.19% of the adult population and is the second consecutive increase in the insolvency rate.
Companies entering insolvency has seen a 2.2% increase in Q3 2016 compared to Q2 2016. It is estimated the liquidation rate in the last 12 months ending September 2016 was 0.41%, the lowest level since comparable records began in the last quarter of 1984.