What can be classed as individual insolvency?
The Government this week released multiple documents detailing the number of individual insolvencies filed by region from the turn of the millennium to 2014.
These statistics were broken down into parliamentary constituencies as a method of obtaining the most reliable regional data, so along with discussing which places appear inundated with insolvencies over the last 14 years, we wanted to take a look at the Government’s criteria for an individual insolvency.
Good news for the South
From an immediate overview of the regions, three stand out as having the lowest total of individual insolvency rates in their respective parliamentary constituencies. These are the South East, London and the North West.
But it isn’t good news for everyone in the south. The South West features in the group of regions where parliamentary constituencies contain the highest total insolvency rates, along with the North East, the East Midlands, Merseyside and parts of Yorkshire.
Many constituencies in coastal towns and cities also fall into this high personal insolvency category. Although this outcome is perhaps not all that surprising when you consider that findings from the Insolvency Service at the end of summer highlighted places on the English coast as the highest concentrated areas for individual insolvencies in 2014.
Documenting an individual insolvency
So what are the defining factors used by the Government to assess a personal insolvency? There are always going to be exceptions, but generally the total individual insolvencies for each constituency arise from the combined sum of the following three predicaments:
Bankruptcy – This is a form of debt relief available to anyone who cannot pay off their debts. Any assets are transferred to an appointed insolvency practitioner or official receiver, known as a trustee, who assesses their worth and then accordingly distributes the proceeds to creditors.
Debt Relief Order – Commonly abbreviated to DRO, debt relief orders are available to those with a debt of less than £20,000 who also have a low income and a low value in assets. In these cases, there is no distribution to creditors as with bankruptcies.
Individual Voluntary Arrangement – Also know as an IVA, this situation is where the individual voluntarily repays creditors either some or all of what they owe, and the agreed arrangement is determined by what is approved by 75% or more of the creditors. The whole procedure is supervised by licensed insolvency practitioners.
The full documents detailing complete individual insolvency statistics for each constituency in England are available to download from the Government website by visiting the the following link: https://www.gov.uk/government/statistics/individual-insolvencies-by-region-2014-parliamentary-constituency-supplement
The team at Financial Saviour are experts in financial restructuring and turnaround from individual insolvencies. We are licensed insolvency practitioners who tailor our approach to your individual situation, whatever help or support is required.