Personal Insolvencies Hit Record High in 2009

    ADLINGTON, ENGLAND, February 10, 2010 /24-7PressRelease/ -- A record number of people in England and Wales were declared insolvent during 2009, according to the latest statistics from the fourth quarter. Personal insolvencies showed no sign of slowing in the final months of 2009, with figures released by the Insolvency Service showing an increase in applications for Individual Voluntary Arrangements (IVA), Debt Relief Orders (DRO) and Bankruptcy claims.

The total number of personal insolvencies for 2009 reached 134,142, an increase of 25.9% on 2008 figures. This is equivalent to approximately one in every 320 adults in England and Wales becoming insolvent.

The 134,142 personal insolvencies consisted of 74,670 bankruptcies, 47,641 Individual Voluntary Arrangements, and 11,831 Debt Relief Orders. This equates to bankruptcies increasing by 10.7% on 2008 and IVAs increasing by a significant 21.8% on 2008 figures.

Debt Free Direct, a leading provider of impartial debt advice and debt solutions, expects to see insolvency figures continue to increase during the first quarter of 2010. Derek Oakley, Insolvency Director at Debt Free Direct stated, "Although Britain has now been declared out of the recession, we expect to see personal insolvency figures continue to rise over the coming months."

In the last three months of 2009 alone, there were 35,574 individual insolvencies in England and Wales. This included 17,007 bankruptcies, 13,219 IVAs and 5,348 Debt Relief Orders.

These figures from the fourth quarter represent an increase of 24.9% on the same quarter of 2008. However, these figures have shown that bankruptcy actually decreased 5.5% on the corresponding quarter of the previous year. The decrease in bankruptcy may be partially attributed to the introduction of the Debt Relief Order (DRO), which came into effect in April 2009 and offers an alternative route to personal insolvency.

In comparison, Individual Voluntary Arrangements, or IVAs, were up 26.3% on the corresponding figures from quarter 4 of 2008. A legally binding debt solution, IVAs offer many consumers a way to reduce their monthly debt repayments, freeze interest charges, and stop creditor harassment. This debt solution typically lasts for five years and is often used as an alternative to bankruptcy.

"The figures released today show the full extent of the financial difficulties felt in England and Wales during 2009," said Mr Oakley. "Unfortunately, there are still thousands more people in the United Kingdom struggling with financial problems, and we would advise them to consider asking for debt help."

Based on statistics compiled by the Insolvency Service, Debt Free Direct is the UK's number one provider of IVAs. The company recommends those with serious financial problems seek unbiased debt advice tailored to their individual circumstances before deciding on any debt solution.

For more information on Bankruptcy, IVA and debt solutions, visit the Debt Free Direct website, http://www.debtfreedirect.co.uk/

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