The Office for National Statistics has released personal insolvency figures made up to Q2 of 2012.
The rate of bankruptcy (including Debt Relief Orders) has returned to 2007 / 2008 levels at around 15 Bankruptcies / Debt Relief Orders per 10,000 of the adult population; down from a peak rate of 20.8 in the first two quarters of 2010 but remaining significantly higher than pre-2004 rates of less than 10.
The rate of Individual Voluntary Arrangements appears to have reached a plateau at around 11.1 IVA’s being entered into per 10,000 of the adult population, down slightly from a peak rate of 11.8 in Q3 of 2010.
There is no official record of Debt Management Plans which are loosely regulated alternatives to Bankruptcy, Debt Relief Orders and Individual Voluntary Arrangements, but insolvency trade body R3 estimate that there are between 300,000 to 700,000 Debt Management Plans in operation and their research indicates that the average plan lasts for up 8 years, with 25% lasting for 10 years or more.
Commenting on the latest figures, Stephen Wainwright, Partner at Poppleton & Appleby said “These figures show that the rate of personal insolvency remains at a historically high level but do not reflect the full extent of the personal insolvency problem in this country.”
Speaking specifically about Debt Management Plans he added “My concern is that there are many people out there who have been reduced to debt slaves under lengthy Debt Management Plans which were set up without a proper analysis of each individual’s financial position and without looking at all the options available to them. We offer a free consultation to anybody who is struggling with debt and in many cases can even offer improved solutions to those people who are currently under Debt Management Plans”
If you have a client or know somebody in need of insolvency advice please do not hesitate to contact Poppleton & Appleby on 0161 228 3028.