Personal insolvencies fall by 3.2% in November

Latest figures from the Insolvency Service have indicated that personal insolvencies in England & Wales fell by 3.2% to 9,372 in November 2021 compared to 9,678 in October 2021, and were 0.4% higher than November 2020’s figure of 9,339.

There were 2,054 DROs and 630 bankruptcies in November 2021 in England & Wales. The number of DROs in November 2021 was 44% higher than in November 2020 but 13% lower than in November 2019. Changes to DRO eligibility came into effect on 29 June 2021, including an increase in the level of debt at which people can apply for a DRO from £20,000 to £30,000. The increase in the number of DROs registered since June 2021 is likely to have been caused by this expansion of the eligibility criteria.

Bankruptcies were 33% lower than in November 2020. Debtor applications were 34% lower and creditor petitions were 29% lower than in November 2020.

The bankruptcies were made up of 552 debtor applications and 78 creditor petitions. Monthly bankruptcy numbers between July and November 2021 were lower than those in 2020, which were already lower than pre-pandemic levels. Compared to November 2019, total bankruptcies were 54% lower; debtor applications were 51% lower and creditor petitions were 66% lower.

There were, on average, 7,002 IVAs registered per month in the three-month period ending November 2021, 1% lower than for the three-month period ending November 2020 and 2% higher than the three-months ending November 2019.

In November 2021 there were 4,863 breathing space registrations. This was made up of 4,773 (98.1%) standard breathing space registrations and 90 (1.9%) mental health breathing space registrations.

Christina Fitzgerald, Vice President of insolvency and restructuring trade body R3 said “The personal insolvency figures, monthly fall has been driven by a reduction in Individual Voluntary Arrangements.”

“It’s also worth noting that Debt Relief Order numbers increased slightly month-on-month, and that can be attributed to the widening of the eligibility criteria for this procedure introduced at the end of June. This has led to a greater number of people seeking help with their financial difficulties via this procedure.”

“Despite today’s news, times are still tough for many people in England and Wales. Households are facing increases in energy bills, the cost of living has increased, and only yesterday the Bank of England increased interest rates in response to rising inflation.”

“We know large numbers of people are having issues paying their rent and bills as a result of the pandemic, and we have yet to see the full effect of the ending of the furlough scheme, which has been a vital safety net for many, on people’s incomes and job security.”