The final quarter of last year saw a record number of personal insolvencies. In total, 115,299 people were declared insolvent in 2018 in England and Wales.

Of these insolvencies, there were just over 71,000 Individual Voluntary Arrangements (IVA’s). IVA’s are a private deal or agreement with debtors to allow them to repay creditors, usually over a period of five years. The last quarter of 2018 saw the highest amount of IVA’s ever to be recorded.

Bankruptcies were also up by ten per cent on the equivalent quarter for the previous year, Debt Relief Orders (DRO’s) also increased by eleven per cent.

If I were to speculate on the reasons for the rise in insolvencies it would be that banks are now tightening their lending criteria, under pressure from the Government due to increasing insolvencies. However, this practice results in there being, ironically, more personal insolvencies as households cant take on further debt to live on. In effect, there is no ‘wriggle room’ and individuals are then faced with becoming insolvent.

If the banks continue to tighten lending criteria, this can only lead to more personal insolvencies, whether in the form of bankruptcy, IVA’s or DRO’s.

If you are struggling to manage your debts and feel you are no longer able to pay them back, it is vital you get in touch with a professional at the earliest opportunity who can discuss your options including consolidating debts, entering into an Individual Voluntary Arrangement, Debt Relief Orders, or bankruptcy.

Farleys’ specialist personal insolvency team are on hand to provide tailored legal advice with a down to earth approach ensuring you are happy with the steps you are taking to managing your debts. To speak to the team in confidence please call 0845 287 0939 or send your enquiry through our online contact form and we will get back to you.