DTI insolvency figures reveal increase

Friday, November 4, 2005

The Department of Trade and Industry (DTI) has announced that the number of individual insolvencies in England and Wales is almost 50 per cent higher than this time last year.

New figures released by the government on company and individual insolvencies for the third quarter of 2005 show that the 17,562 individual insolvencies was also a rise of 11.6 per cent from quarter two.

The insolvencies were made up of 12,043 bankruptcies (an increase of six per cent on the previous quarter) and 5,519 Individual Voluntary Arrangements (IVAs) a rise of 26.1 per cent on the previous quarter.

Experts have put the rise in figures down to the availability of credit and an increase in prime sub-letting.

"It is easier now to obtain credit than it has ever been," Jill Hankie of the Bankruptcy Advisory Service told BBC Radio Five Live's Wake Up To Money.

"You just need to look at the number of credit cards that have flooded the UK market and the easy availability of personal loans."

A bankruptcy order is made when a court is satisfied that there is no prospect of an outstanding debt being paid, whereas IVAs allow the debtor to come to an agreement with the creditor.