Personal insolvencies rise by 4.5%

Latest monthly figures from the Insolvency Service for England & Wales have indicated that personal insolvencies increased by 4.5% to 10,013 in September 2022 compared to 9,584 in August, and were 0.5% higher than September 2021’s figure of 9,967.

Personal insolvencies also decreased 18.5% from September 2019’s total of 12,280.

There were 535 bankruptcies registered, which was 15% lower than in September 2021 and 61% lower than September 2019.

The bankruptcies were made up of 432 debtor applications and 103 creditor petitions. Monthly bankruptcy numbers over the past year were lower than the numbers in 2020, which were already lower than pre-pandemic levels.

There were 1,812 Debt Relief Orders (DROs) in September 2022, which was 16% lower than September 2021 and 26% lower than the pre-pandemic comparison month (September 2019).

There were, on average, 7,188 Individual Voluntary Arrangements (IVAs) registered per month in the three-month period ending September 2022, which is 5% higher than the three-month period ending September 2021, but 4% lower than the three-month period ending September 2019. IVA numbers have ranged from around 6,300 to 7,800 per month over the past year.

Of the 6,177 Breathing Space registrations in September 2022. 6,085 Standard breathing space registrations, which is 21% higher than the number in September 2021 and there were 92 Mental Health breathing space registrations, which is 10% higher than the number in September 2021.

Christina Fitzgerald, President of R3 said “When it comes to personal insolvency, the monthly increase has mainly been caused by a rise in the Individual Voluntary Arrangement (IVA) numbers, which suggests that the issues around the cost of living are causing more people to seek help with managing their debts.

“The past couple of years have been extremely tough on many people’s personal finances and household budgets are significantly more stretched than they were a year ago.”

“The rise in the cost of living is showing no sign of slowing down, real wages have fallen, and more and more people are being forced to borrow money to pay their bills.”