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IVA numbers rocket as bankruptcy figures fall

Personal insolvency up 17.9% in England and Wales

A woman cutting up credit cards

Debt is a fast-growing problem in the UK and Europe

Personal insolvencies in England and Wales rocketed by 17.9% in the first quarter of 2010 compared with the same period last year, while figures in Northern Ireland surged by 24.2%. Personal insolvencies in Scotland fell by 9.9%.

Personal insolvencies in England and Wales

There were 35,682 individual insolvencies in England and Wales in the first quarter of 2010, according to new statistics published today by the Insolvency Service. This was an increase of 17.9% on the same period a year ago.

The total is made up of 18,256 bankruptcies (down 10.7% on the corresponding quarter of the previous year), 11,782 Individual Voluntary Arrangements (IVAs), (up 20.1% on the corresponding quarter of the previous year) and 5,644 Debt Relief Orders (DROs). 86.5% of bankruptcies were made on the petition of the debtor, slightly up on recent quarters.

Scotland and Northern Ireland

There were 5,175 personal insolvencies in Scotland during the first quarter of 2010, down 9.9% on the same period in 2009. The total was made up of 3,142 sequestrations (the Scottish equivalent of bankruptcy) and 2,033 protected trust deeds (the Scottish equivalent of an IVA).

Northern Ireland saw the biggest overall jump in personal insolvencies in the UK, with 554 cases in the first quarter of 2010, up from 446 in the same period in 2009. This represents a leap of 24.2%

Clear need for independent debt advice

Martyn Saville, Which? principal researcher, commented: ‘These shocking new figures show that while the economy as a whole has emerged from recession, the delayed impact is still being felt by thousands of families. Many consumers who turned to loans, overdrafts and credit cards to get them through the past couple of years are now struggling to repay those debts, with an increasing number turning to bankruptcy and IVAs.

‘Individuals struggling with debt should seek independent, free debt advice directly from the Consumer Credit Counselling Service, National Debtline or their local Citizens Advice Bureau. Under no circumstances should you use a commercial debt management company – why pay for a profit-driven, biased service when a better alternative is available for free elsewhere?’

Which? debt advice

For more detail, including contact numbers and web addresses for free debt advice charities, see the Which? guide to dealing with debt. If you think you may be at risk of losing your home, read the free Which? guide to repossession.

Which? and Which? Money members also have free access to the expert Which? Money Helpline. See your latest magazine for contact details.

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