Personal insolvencies increased by 12% in November

Latest monthly figures from the Insolvency Service for England & Wales have indicated that personal insolvency figures increased by 12.2% in November 2024 to a total of 10,012 compared to October’s total of 8,924, and increased by 25.5% compared to November 2023’s figure of 7,978.

The personal insolvencies consisted of 589 bankruptcies, 3,693 debt relief orders (DROs) and 5,730 individual voluntary arrangements (IVAs). Monthly DRO numbers between April and November 2024 were at record highs.

The 5,730 IVAs registered in November 2024 which was 34% higher than in November 2023, and 25% higher than in October 2024. The number of bankruptcies in November 2024 was 589, which is lower than the monthly average seen over the past 12 months.

There were 7,626 breathing spaces registered under the Debt Respite Scheme in November 2024. This is 2% higher than in November 2023. Of the 7,626 breathing space registrations, 7,506 were Standard breathing space registrations and 120 were Mental Health breathing space registrations.

Tim Cooper, President of R3, the UK’s insolvency and restructuring trade body, and a partner at Addleshaw Goddard LLP, said “When it comes to individual insolvencies, the monthly increase has been driven by a rise in Individual Voluntary Arrangements (IVAs) while Bankruptcy and Debt Relief Order (DRO) numbers have fallen slightly. The year-on-year increase has been driven by a rise in DROs and IVAs, while Bankruptcies have fallen compared to this time last year.

“Changes to the Debt Relief Order threshold and the abolition of its administrative fee have seen more people entering this process instead of a Bankruptcy or IVA, but continued demand for these processes coupled with high numbers of people entering a Breathing Space show that the UK has a growing issue with personal debt.

“Demand for personal insolvency support is very much still being driven by cost-of-living issues. People who were struggling but getting by are now turning to an insolvency process in increasing numbers as ongoing rising prices have pushed their expenses to an unmanageable level. With Christmas just around the corner, many are looking at how they can cut their spending on both essentials and luxury items as they prepare for the festive season and the spending associated with it.”