Personal insolvencies drop back from six-year high across England and Wales

Personal insolvencies fell back from a six-year high in the third quarter of this year, official figures show.

Across England and Wales, 25,151 personal insolvencies were recorded between July and September – a 10.5% fall compared with the previous quarter when there were 28,108 personal insolvencies – the highest quarterly figure since 2012.

The figures are made up of bankruptcies; debt relief orders (DROs), which are aimed at people with smaller debts which they have no realistic prospect of paying off; and individual voluntary arrangements (IVAs), whereby money is shared out between creditors.

The Insolvency Service, which released the figures, said the fall in personal insolvencies was driven by a decrease in IVAs, which reached a record high in the second quarter of this year when 17,114 were recorded, but fell by 18% in the third quarter to reach 14,040.

Bankruptcies and DROs both increased slightly compared with the previous quarter.

The Insolvency Service also said there were 4,308 new company insolvencies in the third quarter of 2018.

When bulk insolvencies were stripped out of the figures, the underlying number of company insolvencies had increased by 8.9% on the previous quarter and by 19.3% compared with a year earlier.

An increase in underlying creditors’ voluntary liquidations (CVLs), which were at their highest level since the first quarter of 2012, pushed up the company insolvency figures.

CVLs happen when shareholders of a company pass a resolution that a company is wound up voluntarily.