Personal Insolvencies fall by 10.1%

Latest figures from the Insolvency Service have indicated that personal insolvencies in England & Wales fell by 10.1% to 8,434 in December 2021 compared to 9,385 in November 2021, and were 12.4% lower than December 2020’s figure of 9,625.

There were, on average, 6,648 IVAs registered per month in the three-month period ending December 2021, 16% lower than for the three-month period ending December 2020 but 15% higher than the three-months ending December 2019.

There were 1,872 DROs and 434 bankruptcies in December 2021 in England & Wales.

The number of DROs in December 2021 was 51% higher than in December 2020 but 10% lower than in December 2019. Changes to DRO eligibility came into effect on 29 June 2021, including an increase in the level of debt at which people can apply for a DRO from £20,000 to £30,000 (as indicated on Figure 2). The increase in the number of DROs registered since June 2021 is likely to have been caused by this expansion of the eligibility criteria.

The bankruptcies were made up of 380 debtor applications and 54 creditor petitions. Monthly bankruptcy numbers between July 2021 and December 2021 were lower than those in 2020, which were already lower than pre-pandemic levels.

Bankruptcies were 47% lower than in December 2020. Debtor applications were 49% lower and creditor petitions were 33% lower than in December 2020.

Compared to December 2019, total bankruptcies were 60% lower; debtor applications were 59% lower and creditor petitions were 66% lower.

Christina Fitzgerald, Vice President of insolvency and restructuring trade body R3, said “Turning to the personal insolvency figures, the monthly reduction has been driven by reduction in all forms of personal insolvency process, while the annual fall can be attributed to a drop in bankruptcies and Individual Voluntary Arrangements.”

“Despite this, times are still tough for people in England and Wales. Many are worried about the future of the economy and their own personal finances, and are cautious about how they spend their money and what they spend it on.”

“Inflation is also becoming a problem, with rising energy bills and increasing household costs squeezing people’s finances. We’re also seeing growth in demand for unsecured credit as people turn to credit cards and overdrafts to pay for Christmas or to help manage their finances.”