More people became insolvent between June and September this year, a total of over £25,000.00. The breakdown of these insolvencies was as follows: 61% were IVA’s, 25% were Debt Relief Orders (DRO’s) and the remaining 14% were bankruptcies. The figures were released by the Insolvency Service recently.
There is no definitive reason why insolvencies, and particularly IVA’s, have increased so much. Speculation is that real wages and exhausted credit limits may have helped to push people into insolvency. There has been a persistent rise in personal insolvencies since 2015 and particularly in the growth of IVA’s.
While the personal insolvency resulting in an IVA is never ideal if you take the perspective of a ‘glass half full’ then it can be seen that IVA’s are a rescue mechanism for people with debt that has got out of hand. IVA’s are often used to help resolve the problem of consumer debt that has got out of hand and, while they may be at a record high, the rises and falls in IVA numbers can be linked to changes in the market and access to IVAs rather than increased individual indebtedness.
Whatever the reason for the rise in insolvencies and in particular IVA’s it is certainly not a flash in the pan as steady growth over the last 2 to 3 years has shown, it is a persistent and growing trend for insolvencies and debt in the UK economy.
If you are struggling with unmanageable debts, it is advisable to speak with a professional at the earliest opportunity. Farleys Solicitors have a team of expert personal insolvency solicitors who can provide advice on IVAs and help you manage your debt. Call us today on 0845 287 0939 or submit your enquiry through our online form.