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Personal insolvencies at 10 year low

May 15, 2015 | Financial Saviour

Following the news that corporate insolvencies have fallen to their lowest since the end of 2007, statistics from the Insolvency Service also show that individual insolvencies in England and Wales have dropped to their lowest levels for a decade.

Despite times of low inflation, unemployment and booming interest rates, figures indicated that, for the opening three months of 2015, personal insolvencies had decreased for a third successive quarter and, at just under 21,000, hit their lowest amount since 2005. This total was down 8.7% on the final quarter of 2014 and astonishingly almost 20% down on the previous period last year.

It is thought that a number of factors have played a role in this significant drop, namely the decrease in lending opportunities in 2008 which eventually lead to lower levels of personal debt and the stricter rules surrounding creditor’s affordability checks which resulted in individual’s borrowing outside of their means.

Individual voluntary arrangements counted for around half of all personal insolvencies in the first quarter of 2015; a 13% drop from the final quarter of 2014 and 24% down on last year’s same period signalling a steady decrease since the turn of the decade.

The remaining personal insolvencies cases in the first three months of 2015 included 4,209 bankruptcies and 6,213 debt relief orders – both a significant amount lower than the same period in 2014.

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