www.iva.co.uk

The number of people declared insolvent in England and Wales has fallen by 8% during the past year despite the impact of the credit crunch, figures show.

A total of 24,553 people went insolvent during the period, 2% fewer than during the first quarter of the year and 8.3% less than in the same period of 2007.

Within the total, there were falls in both the number of people going bankrupt and the number taking out individual voluntary arrangements (IVAs), under which interest on debt is frozen in exchange for a set amount being repaid each month.

Around 15,297 people were declared bankrupt during the period, 1.3% fewer than during the first quarter and nearly 6% less than in the corresponding period of 2007, while IVA numbers dropped 12% year-on-year to 9,256.

Commentators had been predicting a fall in the number of IVAs taken out, but bankruptcies were expected to have risen slightly.

Overall, the total number of people who went insolvent during the quarter was the lowest figure since the third quarter of 2006.

Charles Turner, director of personal insolvency at PricewaterhouseCoopers, said: "I'm not particularly surprised that the numbers have fallen a little.

"I think the trickle-down effect of the credit crunch hasn't really hit bankruptcy and IVA numbers 'big style' yet."

But he said he expected the figures to begin increasing again over the next six to 12 months.

He said: "People have been less able to borrow from mortgage providers on a secured basis and they have been forced to turn to unsecured borrowing to fund necessities, which will feed through into the personal insolvency numbers over the longer term, but will not be instantaneous."

Source, The Press Association

It's going to be interesting to see how many more will be joining the forum seeking sound advice in the future. It feels as if the whole country is hanging on in there by the skin of it's teeth.

Hi
I totally agree quark
There are many thousands of people simply treading water,if things don't improve,especially the housing market,then we will see a surge in personal insolvencies
Regards

I am surprised by those figures Andy, I would have put money on the fact that they must have risen in the light of the current economic climate. How wrong I was. Kazzy x

Hi Kazzy
I think that personal insolvency takes around 6-12 months to filter through once there has been a downturn in the economy and house prices.Many people struggle on for many months before accepting the inevitable.
We will see a dramatic rise within the next twelve months
Regards

Good points Quark and Andy.
I think the country has only just dipped a toe in the waters of a recession, in my opinion there is much worse to come.(It's being so cheerful that keeps me going)
I would hazard a guess though, with the state the uk banking industry is in, they may start to get tough and IVA's may be harder to get.

Well let's hope that others out there are as fortunate ? dunno if that's the correct terminology to use, as some of us on this forum and are able to secure an IVA where appropriate in the future as a way of gaining some control of their finances, hope the banks don't start riding rough shot, i can't see they would, more people going BR surely means they would receive less. I dunno, i'm waffling

Just imagine BA filling in an income and expenditure sheet if they were able to apply for an IVA.

Average daily expenditure on fuel...£8 million.

Makes my 12 year old Honda Civic seem positively carbon neutral.

Blimey, and they've just ordered 6 new planes would you believe ?

I work for a company that is heaviy reliant on the aerospace industry, i see some dark times coming.

HI andie

As the statistics got something to do with more people going on dmps as oppossed to bankrupcy and that creditors are now willing to accept these as a soloution for dealing with their debt problems. All in all it is an encouraging sign.

The DMP industry is definately growing, but as it is largely unregulated there are few statistic on which to gauge success or otherwise. Creditors certainly seem to be preferring DMPs where their customers could pay out within 6 or 7 years, but we need to go some way before there is a consistence in the area of interest and charges stoppage.