Figures released later today are expected to confirm predictions that personal insolvencies continue to be on the decline. Additionally, if the trend continues for the remainder of 2013, the number of individuals in a formal personal insolvency procedure could fall below 100,000: the lowest figure since 2005.
Sandra McAlister, director of South Wales insolvency firm, McAlister & Co, warns against mistaking the drop in bankruptcies, IVAs and Debt Relief Orders, for an improvement in the financial situation of individuals.
“Whilst these figures do provide some positive news, many indebted individuals and families are just about treading water. Sometimes, even people with very large amounts of unmanageable debt do not seek help, or a solution in the form of a personal insolvency procedure. We often see ‘waves’ of activity within personal insolvency, as much of the time, people do not act until there is a ‘trigger’. The changes to the benefit system are a looming trigger and this could jolt a large number of individuals into seeking a solution, such as an IVA, or having a procedure such as bankruptcy, thrust upon them by an aggressive creditor.”