AROUND 45 per cent of adults in Yorkshire and the Humber believe the “social stigma” attached to entering an insolvency procedure has fallen over the last decade, according to research by the insolvency trade body R3 and ComRes.
The Yorkshire figures reflect a UK-wide shift in attitudes towards people with financial troubles. Half of the people surveyed on behalf of R3 across Britain believe the stigma attached to insolvency has fallen since 2005.
In 2000, there were 29,000 personal insolvencies, or 7.2 for every 10,000 adults. In 2014, there were 98,000 personal insolvencies, or 21.8 for every 10,000.
Adrian Berry, chairman of R3 in Yorkshire and partner at Deloitte, said: “The idea of a ‘stigma’ around entering an insolvency procedure is one of the barriers to people dealing with problem debt. It’s very welcome that there is an increasingly non-judgemental attitude to people entering an insolvency procedure.
“People can end up with unmanageable debts for all sorts of reasons. What’s more important is that people with problem debts seek advice to find a solution to their problems as quickly as possible. If people in debt don’t consider all their options, they could miss out on the most effective solution.”
The research also found that only 31 per cent of adults in Yorkshire see entering an insolvency procedure as ‘an easy way out’ from having to repay debts, compared with 37 per cent nationally. Just under half (47 per cent) of adults in Yorkshire and the Humber believe that insolvency can be an opportunity for a fresh start.
Mr Berry said: “The fall in stigma is probably linked to the big rise in debt and insolvencies since the turn of the century.
“An explosion of consumer debt levels led to more insolvencies, which helped make the idea of entering insolvency less unusual. This, in turn, might have made people more likely to use an insolvency procedure to deal with unmanageable debts.
“The insolvency regime is there to provide a balance between creditors and those in debt. On the one hand it provides debt relief to those who are struggling. But on the other, it helps creditors see more of their money back than they otherwise would have done.”
However, only 29 per cent of British adults said they had a ‘good’ understanding of what happens when an individual enters an insolvency procedure.