Insolvency figures at four-year low
Filed under: Debt
Within these figures, bankruptcies are at their lowest since 2003, with 8,088 bankruptcy orders made in the second quarter of this year, representing a 27% drop on a year ago, the Insolvency Service report showed.
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The service said that bankruptcy numbers have been affected by the introduction of debt relief orders (DROs), which have risen to reach a similar level to bankruptcies for the first time.
DROs, which were introduced in 2009 and are often dubbed "bankruptcy light", reached a new high in the second quarter of this year at 7,956, an increase of almost 10% on a year ago.
Individual voluntary arrangements (IVAs), which are also included in the figures, were down nearly 7% year-on-year to 11,346. Bankruptcy numbers have now been lower than IVAs for more than a year.
Analysts have said the official figures are the tip of the iceberg for people struggling with debt, with an estimated six million households living on the edge.
Debt charity the Consumer Credit Counselling Service (CCCS) warned that millions of households remain "financially vulnerable".
Delroy Corinaldi, CCCS external affairs director, said: "Insolvency is a very difficult thing to have to face and it is usually at the end of a long struggle of trying to deal with debt. The fact that almost 30,000 people had to do this during April, May and June this year is staggering and highlights just how many households need help with their debt problems.
"It underlines why those who do find themselves in this situation need to be able to access free, independent and expert advice as soon as they begin to struggle with their debt."
© 2012 Press Association