Credit, Collections & Insolvency News
Latest figures from the Insolvency Service have indicated that personal insolvency numbers across England & Wales fell by 9.9% to 9,859 in April 2021 compared to March’s figure of 10,941, and were 5% lower than April 2020’s figure of 10,394.
The figures show that there were 1,425 DROs and 812 bankruptcies. The bankruptcies were made up of 739 debtor applications and 73 creditor petitions.
The number of DROs in April 2021 was 4% lower than in April 2020 and 40% lower than in April 2019. Bankruptcies were 1% lower than in April 2020 driven by a drop in debtor applications (6% lower), but creditor petitions were 121% higher. Creditor petitions were particularly low in April 2020 – during the first UK lockdown. Compared to April 2019, total bankruptcies were 46% lower; debtor applications were 38% lower and creditor petitions were 76% lower.
There were, on average, 6,822 IVAs registered per month in the three-month period ending April 2021 this was 22% higher than for the three-month period ending April 2020 and 11% higher than the three-months ending April 2019.
One IVA provider experienced technical issues between December 2019 and March 2020 which resulted in IVAs not being registered with the Insolvency Service on a timely basis. A backlog of IVAs were later registered in May 2020, resulting in an artificial ‘peak’ in that month. This meant the number of IVAs registered in the three-months ending April 2020 was artificially low, so comparisons made with this period may not be valid
Commenting on the figures Christina Fitzgerald, Vice President of insolvency and restructuring trade body R3 said “The month-on-month drop in numbers is a result of a reduction in all types of personal insolvency processes.”
“Although it’s been a torrid twelve months for many, we’ve yet to see that translate into an increase in the number of people entering a personal insolvency process. Government and the private sector have made a significant amount of support available, which has provided a vital safety net for many – although these measures haven’t been able to help everyone.”
“We urge anyone who is worried about their finances to ask for advice from a qualified source – and to do it as soon as possible. It’s a hard step to take, but the sooner you do it, the more potential solutions you have open to you, and the more time you have to decide which of them is the most appropriate.”
Whilst Louise Brittain, Restructuring and Insolvency Partner and personal insolvency specialist at Azets said “The number of debtors petitions (the number of individuals seeking the relief of Bankruptcy) has fallen by 25% from last month but Creditors Petitions and Debt Relief Orders remain roughly the same.”
“This may be because the increases last month have dealt with all the previous debt build up or potentially because debtors are preferring to see how the economy recovers as the country comes out of lock down. With the proposed increases in the limits of those qualifying to enter Debt Relief Orders, it is likely that the number of Debtors Petitions will continue to fall, although this will be dependent on the speed of the recovery of the economy and particularly the job market.”