Personal insolvencies fell by 20.4% in December

Latest monthly figures from the Insolvency Service for England & Wales have indicated that personal insolvencies decreased by 20.4% to 8,339 in December 2022 compared to 10,473 in November. They were 1.3% lower than December 2021’s figure of 8,453, and 0.8% lower than December 2019 (8,406).

There were 397 bankruptcies were registered, which was 13% lower than in December 2021 and 64% lower than December 2019 . The bankruptcies were made up of 321 debtor applications and 76 creditor petitions. Monthly bankruptcy numbers over the past 18 months were lower than the numbers in 2020, which were already lower than pre-pandemic levels.

There were 1,979 Debt Relief Orders (DROs) in December 2022, which was 6% higher than December 2021 but 5% lower than the pre-pandemic comparison month (December 2019).

There were, on average, 7,233 Individual Voluntary Arrangements (IVAs) registered per month in the three-month period ending December 2022, which is 9% higher than the three-month period ending December 2021, and 26% higher than the three-month period ending December 2019. IVA numbers have ranged from around 6,300 to 7,800 per month over the past year.

In December 2022 there were 4,803 breathing space registrations. This is 14% higher than the number in December 2021. There were 4,691 Standard breathing space registrations, which is 15% higher than the number in December 2021. There were 112 Mental Health breathing space registrations, which is 8% higher than the number in December 2021.

Commenting on the figures Christina Fitzgerald, President of R3 said “Turning to personal insolvencies, the monthly fall we’ve seen in the figures published today has been driven by a drop in numbers across all personal insolvency processes, with Individual Voluntary Arrangement numbers being the most dramatic and somewhat surprising given the economic headwinds that we are experiencing.”

“Despite the fall in personal insolvency numbers, it’s been a bleak winter for consumers in England and Wales. Worries about the cost of living are still front of mind, with paying for food, energy and fuel the main areas of concern and with reports this week that price pressures are unlikely to ease anytime soon.”

“Money worries are front of mind for a lot of people at the moment, and they are only spending on the basics – or on items that will help them cut costs elsewhere.”

“We’re also seeing more and more people turn to borrowing to pay their bills, and while the reasons behind this course of action are understandable, debt on top of debt isn’t a sustainable solution.”

“It’s likely we’re facing a precipice situation where the strains of rising living costs, wages failing to keep up with inflation and more people living in negative budgets suggests those who are struggling are running out of road and that personal insolvencies are likely to increase into 2023.”