Personal insolvency numbers fall

Latest figures from the Insolvency Service have indicated that personal insolvencies in England & Wales decreased by 18.5% to 9,409 in April 2022 compared to 11,550 in March, and were 4.7% lower than April 2021’s figure of 9,873.

The personal insolvencies figures show that there were 530 bankruptcies registered, which was 36% lower than in April 2021 and 64% lower than April 2019. The bankruptcies were made up of 443 debtor applications and 87 creditor petitions. Monthly bankruptcy numbers between July 2021 and April 2022 were lower than the numbers in 2020, which were already lower than pre-pandemic levels.

Bankruptcies were 36% lower than in April 2021. Debtor applications were 40% lower but creditor petitions were at a similar level to April 2021.

Compared to April 2019, total bankruptcies were 64% lower; debtor applications were 63% lower and creditor petitions were 71% lower.

There were 1,708 Debt Relief Orders (DROs) in April 2022, which was 20% higher than in April 2021 and 29% lower than the pre-pandemic comparison month (April 2019). This increase is linked to changes to the eligibility criteria 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. There were, on average, 7,516 IVAs registered per month in the three-month period ending April 2022, which is 10% higher than the three-month period ending April 2021, and 22% higher than the three-month period ending April 2019. IVA numbers have ranged from around 6,300 to 7,500 per month over the past year.

There were, on average, 7,516 IVAs registered per month in the three-month period ending April 2022, 10% higher than for the three-month period ending April 2021 and 22% higher than the three-months ending April 2019.

In April 2022 there were 5,388 breathing space registrations. This was made up of 5,282 (98%) standard breathing space registrations and 106 (2%) mental health breathing space registrations.

Christina Fitzgerald, President of R3, the insolvency and restructuring trade body said “The monthly and yearly fall in personal insolvency numbers has been driven by a reduction in all forms of personal insolvency process. However, these figures can’t hide the fact that many people’s finances in England and Wales are stretched to breaking point at the moment. The cost of fuel, food and energy has risen, while wages and take home pay have failed to keep pace with rising costs.”

“People are worried about their financial futures, their ability to manage their money, and the future of the economy. As a result, they are reluctant to spend on anything other than the essentials and are turning to borrowing to cover the gap between wages and inflation.”

“In times like this financial shocks – job loss, a reduction in hours at work, or even an unexpected bill – can result in people quickly moving from struggling to becoming insolvent.”