Insolvencies hit record high

The number of people in England and Wales becoming insolvent rose to a record 35,242 in the third quarter of this year, figures from the Insolvency Service showed today.

The figure has increased by 28.2% since the same period last year, as rising unemployment and the credit squeeze have taken their toll on household finances. The headline figure was made up of 18,347 bankruptcies, 12,390 people entering individual voluntary arrangements (IVAs) with their creditors, and 4,505 people taking out the government's new debt relief orders (DROs).

The number of IVAs – where borrowers arrange to pay off a proportion of their debt over a set period of time – leapt by 20.9% over the year, despite indications that creditors have become less willing to sign up to them.

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The figures are in line with predictions from industry experts who had suggested that growing awareness of DROs would keep the total insolvency figure above 30,000.

More details soon …

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