Personal insolvencies have fallen to their lowest rate since 2005, figures by the Insolvency Service recently revealed.
In 2014, 99,196 individual insolvencies were recorded, the first time that the annual total has dipped below 100,000 for 9 years, and representing what is the 4th year of successive annual decreases.
The figures take into consideration bankruptcies, debt relief orders (DROs) and individual voluntary arrangements (IVAs).
- Bankruptcies reached their lowest level since 1998, at 20,318, down 17.3% year-on-year.
- DROs decreased for the second year in a row, falling 3.1% year-on-year to 26,688 (though their introduction in 2009 has likely exerted a downward pressure on bankruptcy numbers).
- IVAs, however, reached their highest level since they were introduced in 1987, at 52,190, up 6.8% year-on-year, making up more than half of all personal insolvencies in the year, compared with just 30% in 2005.
On the rise of IVAs, Mark Sands, personal insolvency partner at Baker Tilly, said: "This is a sign that people are feeling confident enough about their financial prospects to commit to a 5-year repayment plan, rather than opting to walk away from their debts by entering into a debt relief order or bankruptcy."