As we all look behind at 2013 and on to 2014 research suggests that there may have been a slight drop in the number of personal insolvencies in the final quarter. The data, released by Baker Tilly, estimates that the end of 2013 saw a decrease in personal insolvencies to the expected rate of 25,000.
If accurate the research would suggest that personal insolvencies are at the lowest level since 2005. In total it is estimated that individual voluntary arrangements accounted for just over half, whilst debt relief orders and bankruptcies accounted for around 25% each.
The continued downward trend of personal insolvencies could mean that they are slowly plateauing, finding their natural average levels. The alternative argument is that this could be from consumers reconstructing finance or that many have finally paid off pre-recession debts. The most likely explanation is that the decrease may be a simple knock on effect from tighter lending regulations since the recession took grip. Whilst the data is encouraging there is always a danger that with confidence a boom in borrowing may implode in on itself if interest levels rise in the next few years and the real wage doesn’t follow suit.
There were a total of 99,200 personal insolvency cases last year, broken down into 25,000 bankruptcies, 27,700 debt relief orders and 46,500 IVAs. Since 2011 bankruptcies and DROs have been on a slight decline whilst IVAs have remained flat.
No matter what your current situation McAlister & Co will always offer free, qualified advice. With a dedicated personal insolvency team we know how to best resolve your situation and do not need personal details to talk to anyone about the best route to take. If you or anyone you know needs advice then get in touch, we help hundreds of individuals each year take control of their finances.