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Personal insolvencies soar by 19%

Bankruptcy increases even higher in Scotland

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Decide which debt is the most expensive, and pay this off first

New figures from the Insolvency Service show a surge in personal insolvencies, up by 19% compared with the same period last year.

There were 29,774 individual insolvencies in England and Wales in the first quarter of 2009, an increase of 1.6% on the previous quarter and an increase of 19.0% on the same period a year ago.

This figure comprised 19,062 bankruptcies (up 23.4% on the corresponding quarter of the previous year), and 10,713 Individual Voluntary Arrangements (IVAs), up 11.8% on the corresponding quarter of 2008.

86% of bankrupts filed for their own insolvency, rather than having the move forced on them by creditors.

Scottish sequestration cases soar

The number of sequestrations in Scotland (the Scottish equivalent of bankruptcy) rose by 157.8% compared with the previous year. This was caused in part by the introduction of a new route into bankruptcy, Low Income Low Assets cases, which were introduced in the second quarter of 2008.

Which? debt advice

Consumers struggling with debts should seek independent, free debt advice from organisations such as the Consumer Credit Counselling Service (0800 138 1111), National Debtline (0808 808 4000) or their local Citizens Advice Bureau (number in the phone book).

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Citizens Advice offer free and independent debt advice

It is vital to get independent advice to find the solution that best fits your own circumstances. Consumers should avoid commercial debt management companies – why pay for a service that is available better and free elsewhere?

For more detail, see the Which? guide to dealing with debt.

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