There has been a significant increase in the number of people in England and Wales becoming insolvent. The government's Insolvency Service said 27,644 people went bankrupt or entered into Individual Voluntary Arrangements (IVAs) to manage debts between July and September according to official figures.  Insolvencies are expected to top over 100,000 during the year with statistics showing a 55% increase over the same period last year with experts blaming greater personal debt for these increases.

For most of us, borrowing is a necessity of modern living and, in its place, allows us freedom and flexibility in providing for our families. There are times, however, when the amount of debt in relation to income rises too high and leaves families struggling. Though this can happen due to a sudden change of circumstance such as loss of a job, unexpected medical fees or accidents, more common is a creeping debt problem which slowly takes hold.

Figures have shown that the proportion of people taking out IVA’s has risen relative to those going bankrupt with 15,416 people going bankrupt between July and September with 12,228 people entering into IVA’s compared to a year ago when just over 12,000 people went bankrupt with less than 6,000 entering into an IVA.

The sharp rise in IVA’s has been controversial – an Insolvency Practitioner must be appointed who will generally make an initial charge at the beginning of the process with a supervisory fee being charged for each year the contract is in place.  For further information on IVA’s please visit Downfalls of Voluntary Debt Repayment.

It is also reported that problems for debtors may be about to get worse with the Bank of England considering a UK interest rate rise from 4.75% to 5%.

If you need help with your debt problems, complete our application form and we will arrange for an Advisor to visit you and help you on the road to financial recovery.

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