UK Bankruptcies Falls to 15 Year Low

October 31, 2014

Luke-Notley small (Custom)The number of people filing for bankruptcy in the UK has fallen to a 15 year low, according to figures from the Insolvency Service. The 4,886 bankruptcy orders between July and September represents a fall by 19% from the same period in 2013 and the lowest number of orders this millennium.

Not since the first quarter of 1999 has an annual quarter recorded fewer bankruptcy orders. The 24,837 who went into insolvency during this period represented an 8% decrease over the previous quarter and it is believe this is partially due to the recovery of the UK economy.

There has been a trend of falling bankruptcies following the development of debt relief orders, a form a debt management aimed at those with small levels of debt but no realistic means to pay it off. This has helped thousands of people in the UK manage their debts without seeking bankruptcy.

The 6,808 people in the UK who took our debt relief orders between July and September this year demonstrates how they have become a more popular solution for many debtors. Additionally the number of people taking out IVAs as a debt solution method grew to a record high during this year’s second quarter.

Accountancy and business advisors BDO have suggested many UK citizens are yet to experience the benefits of the improving economy. Matthew Chadwick, head of personal insolvency at BDO, explained: “Jobs figures are up, mortgage rates are down – and becoming more competitive – and interest and inflation rates are stable, which in theory should boost economic health and confidence.

“However, these positives are counterbalanced by sluggish or non-existent wage growth, lower-than-expected tax revenues – suggesting that the new jobs being created may not all pay well – and market volatility caused by worries over the Chinese and Eurozone economies.

“Paradoxically, we may see personal insolvencies rise as confidence returns. Then, people may feel more comfortable with taking out new credit, and lenders more comfortable with collecting old debts.”

It was revealed earlier this year that 44% of British adults are worried about their levels of debt and one in four 25-to-44 year olds in the UK have five or more debts to their name.

If you are struggling with debt and want more information about the options available to you including bankruptcy, IVAs and debt relief orders visit the InControl homepage or call our experienced customer service team on 0800 072 6623.