Bankruptcy fall ‘not the whole story’

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Bankruptcies have hit their lowest levels since 2004 as fewer people were declared insolvent in the third quarter of this year, official figures showed.

But analysts warned that the figures did not give the full picture of those with severe debts.

The Insolvency Service said individual insolvencies overall in England and Wales decreased to 30,219 in the third quarter, down from 30,513 in the three months to June.

The latest figure represents a 1 per cent drop on the previous quarter and an 11 per cent fall on the same period last year.

Of this figure, the number of bankruptcies has tailed off to 9,567, a sharp fall of almost a third (31.2 per cent) on the same period last year. The last time there were so few bankruptcies was in 2004, when there were 8,999 in the last three months of that year.

Meanwhile, the number of debt relief orders stands at 7,604, a 7.6 per cent rise on the same time last year and individual voluntary arrangements (IVAs) are up 0.7 per cent on last year, with 13,048 people entering into an IVA between July and September.

Chris Nutting, director of personal insolvency at KPMG, said of the bankruptcy figures: “Whilst this may seem to be good news on the face of it, it fails to reflect the number of people with severe personal indebtedness.

“There is a growing number of individuals with large amounts of unsecured debt looking for some resolution of their financial problems which have simply not gone away.”