Statistics released by the Insolvency Service show that bankruptcies in England and Wales have declined by 21% compared on the previous year. Year on year bankruptcy insolvency solutions have declined including debt relief orders (a cheaper route into bankruptcy).
However, IVAs increased in the last three months, compared to last year by 5.7%. The number of Individual Voluntary Arrangements (IVAs) increased to 13,394.
Number of People Entering Bankruptcy
The number of people deciding to enter bankruptcy to resolve their money problems still remains high, however the figures do continue to fall.
Bankruptcies in the last three months were 6,004 (21.4% less than the same time last year) and 6,632 debt relief orders (14.7% less than the previous year). The debt relief order is a route into bankruptcy costing £90, instead of the usual £700.
To enter a debt relief order a person must meet a specific criteria, otherwise they will have to enter bankruptcy via their local court. The number of court bankruptcies are falling but the debt relief order route is becoming more popular.
There are solutions which are alternatives to bankruptcy, which many people may be suitable for. Debt management plans are informal debt solutions and are not registered anywhere. It's thought that there are 500,000 debt management plans active in the UK.
An IVA is an alternative debt solution for somebody to enter in order to resolve debt problems. The IVA debt solution typically lasts for 5 years and at the end of the solution the remaining debt is written off. A bankruptcy will only ever last for 1 year, however, if it's determined a payment plan is applicable then the monthly repayments could last for 3 years. The official receiver in bankruptcy will decide if a payment plan is suitable and how much should be taken every month.
Bankruptcy Debt Advice
If you think you are suitable for bankruptcy then talk it over with a qualified debt advisor. The money and debt advisor will have the knowledge and experience to explain the full process and tailor the advice to your exact situation. This means they can discuss income, expenditures, what debts can be included and assets, like houses, cars, stocks, share and savings.
The debt advice team will also explain if you would be suitable for other debt solutions so you can become debt free.
You can speak to our charity debt advisor on 0800 085 0226 or by completing our debt analyser and requesting a call back.