The latest official figures published by the Insolvency Service show there was a total of 22,503 individual insolvencies in England and Wales in Q2 2016, comprising 3,537 bankruptcies, 6,741 debt relief orders (DROs) and 12,225 individual voluntary arrangements (IVAs).
Individual insolvencies increased 6.9 per cent compared to the previous quarter, which was the fourth consecutive increase, and up 22.4 per cent compared with the same period last year.
Commenting on the figures, Mark Sands, personal insolvency partner at RSM said:
‘The rise in personal insolvencies has largely been due to an uplift in the number of people entering IVAs, up by 15 per cent over the last quarter and by 43 per cent versus the same period last year. This might be because debt advisers have been signposting more people towards IVAs rather than towards more informal debt management plans because of a compliance clampdown by the regulator.
‘We’ve also seen a 16 per cent rise in debt relief orders versus quarter 2 last year, which will be largely be due to a change in criteria which has enabled people with debts of up to £20,000 to use this as a route to deal with problem debts. Around a quarter of DROs in this period involved debt greater than the previous threshold of £15,000.
‘Our own figures also show that so far this year, more women than men have entered into some kind of insolvency procedure, continuing a trend we have seen since 2014. Overall, women accounted for 54 per cent of all insolvency cases in the first half of the year, although the proportion was far higher for debt relief orders where women accounted for 65 per cent of cases. Men, on the other hand, accounted for 62 per cent of bankruptcy cases, which may indicate that men have a tendency to bury their head in the sand when it comes to problem debts, rather than dealing with them at an earlier stage.’