Personal insolvencies fall in November

Latest monthly figures from the Insolvency Service for England & Wales have indicated that personal insolvency numbers decreased by 16.6% in November 2023 to a total of 8,243 compared to October’s total of 9,887, and decreased by 21.3% compared to November 2022’s figure of 10,478.

he lower number of personal insolvencies compared to November 2022 was driven by a decline in the number of IVAs, while DRO and bankruptcy numbers increased.

The insolvencies consisted of 661 bankruptcies, 3,290 debt relief orders (DROs) and 4,292 individual voluntary arrangements (IVAs). The lower number of individual insolvencies compared to November 2022 was driven by a 44% decline in the number of IVAs. IVA numbers in 2023 to date have been lower than in 2022, which saw a record high annual number. DRO and bankruptcy numbers were higher than last year, with DROs in November 2023 being 45% higher than in November 2022, although the number of bankruptcies remained well below pre-2020 levels.

There were 3,290 DROs in November 2023. This was 45% higher than November 2022. DRO numbers were volatile in early 2023 at the time of introduction of new DRO hubs and are now higher than pre-2020 levels.

There were 4,292 IVAs registered in November 2023, 44% lower than November 2022. IVA numbers in 2023 to date have been lower than the record-high numbers in 2022.

There were 661 bankruptcies in November 2023. The bankruptcies were made up of 522 debtor applications and 139 creditor petitions. Bankruptcies were 18% higher than in November 2022. Debtor applications were 17% higher and creditor petitions 20% higher than in November 2022. Bankruptcy numbers so far in 2023 were higher than in the equivalent months of 2022, but remained below pre-2020 levels.

In November 2023 there were 7,484 breathing space registrations. This is 10% higher than the number in November 2022. Of the 7,484 Breathing Space registrations in November 2023. There were 7,351 Standard breathing space registrations, which is 10% higher than the number in November 2022. There were 133 Mental Health breathing space registrations, which is 24% higher than the number in November 2022.

Responding to these latest figures, the charity behind National Debtline is urging people in financial difficulty to seek debt advice and see if they are eligible for the Breathing Space scheme. This gives people time to seek advice and make a plan for dealing with their debt, without being subject to creditor collection and enforcement activity.

Nicky Fisher, President of R3, the UK’s insolvency and restructuring trade body said “Turning to personal insolvencies, the monthly and yearly falls in numbers are due to a drop in the number of people entering a Bankruptcy or an Individual Voluntary Arrangement (IVA). However, the total numbers of Bankruptcies and Debt Relief Orders are higher for this year than for the whole of 2022, as are breathing space numbers, which suggest that the cost of living crisis is leading to more people turning to these procedures to help resolve their financial issues.”

“There’s no denying that money worries have been at the front of many people’s minds for a long time now, and that isn’t likely to change in the future. People are still concerned about the cost of everyday expenses, the economy, and what the coming weeks and months will mean for their personal finances. They’re spending less on non-essentials and shopping around more as they worry about their bills, the cost of food and energy, and have one eye on paying for Christmas.”

“While wages appear to have caught up with inflation, food prices seem to be continuing to rise and energy bills are set to increase further from January, which will mean household budgets will remain tight and finances are likely to remain strained as we head into the New Year.”

David Cheadle, acting chief executive at the Money Advice Trust, the charity that runs National Debtline said “The ongoing cost of living crisis has stretched many people’s budgets to breaking point and we’re unfortunately seeing more people falling into financial difficulty as a result.”

“Today’s figures – including another rise in people accessing the government’s Breathing Space scheme – reflect the growing number of people needing help to deal with debt problems.”

“Breathing Space gives people time to seek free debt advice and find a safe route out of debt without creditors chasing them. However, many people still do not know about the scheme, or how it can help them.”