Personal insolvencies increase by 4.9%

Latest monthly figures from the Insolvency Service for England & Wales have indicated that personal insolvencies increased by  4.9% to 10,514 in October 2022 compared to 10,023 in September,

The figures were 8.6% higher than October 2021’s figure of 9,682 and were also 4.6% higher than October 2019’s total of 10,056.

There were 531 bankruptcies were registered, which was 14% lower than in October 2021 and 62% lower than October 2019. The bankruptcies were made up of 469 debtor applications and 62 creditor petitions. Bankruptcies were 14% lower than in October 2021. Debtor applications were 9% lower and creditor petitions were 37% lower than October 2021.

The 1,894 Debt Relief Orders (DROs) were 2% lower than October 2021 and 25% lower than the pre-pandemic comparison month (October 2019).

There were, on average, 7,610 Individual Voluntary Arrangements (IVAs) registered per month in the three-month period ending October 2022, which is 8% higher than the three-month period ending October 2021, and 13% higher than the three-month period ending October 2019. IVA numbers have ranged from around 6,300 to 7,800 per month over the past year.

Whilst there were 6,342 Breathing Space registrations in October 2022, which is 31% higher than the number registered in October 2021. 6,230 were Standard breathing space registrations, which is 31% higher than in October 2021, and 112 were Mental Health breathing space registrations, which is 38% higher than the number in October 2021.

Commenting on the figures, Nicky Fisher, Vice President of R3 said  “When it comes to individual insolvencies, the monthly increase in numbers is being driven by a rise in Debt Relief Orders and Individual Voluntary Arrangements as more people turn to insolvency processes to address their financial issues.”

“Money worries continue to be front of mind for many people as the costs of food, fuel and energy continue to rise and real wages continue to fall. Many aren’t sure how expensive their energy bills will be and are reluctant to spend money they may need in the future as a result.”

“There are also a lot of people who are struggling to keep up with their bills and credit card payments right now. This makes them vulnerable to financial shocks like a reduction in hours at work, job loss or sudden unexpected bills, and they are the people most likely to need an insolvency process if these shocks hit as they won’t have the savings to absorb them.”