Bankruptcy numbers in England and Wales ‘low compared with pre-lockdown levels’
The number of people going bankrupt across England and Wales fell sharply in May compared with a year earlier, Insolvency Service figures show.
There were 739 bankruptcies in May – down 49% compared with the same month last year – the service said.
It added: “The numbers of individuals entering insolvency through debt relief orders or bankruptcies remained low in May, when compared to pre-lockdown levels.”
In the weeks running up to the coronavirus lockdown, between March 1 and 23, 76 people per working day on average were going bankrupt. In the week immediately after the lockdown, the average number of daily bankruptcies fell to 45.
The number of debt relief orders (DROs) – another form of personal insolvency – was also down by nearly a third (32%) compared with May 2019.
Some 1,540 DROs were recorded in May 2020.
Just prior to the lockdown, there were 119 DROs per day typically and in the days immediately after it the number fell to 65.
The report said: “The fall in DROs and debtor bankruptcies corresponds with a reduction in applications for these services, which coincided with the announcement of enhanced Government financial support for individuals and businesses since the emergence of the coronavirus pandemic.”
Reduced operations in courts are also likely to be a factor in the fall in bankruptcies, it said.
Meanwhile 7,899 individual voluntary arrangements (IVAs) were registered, on average, each month during the three months ending May 2020.
This was an 11% increase when compared with the average number of registered IVAs during each of the three months ending May 2019.
The service said volatility in the data around IVAs meant it was difficult to create reliable short-term trends.
Recent IVA statistics had also been affected by technical issues experienced by one provider, it said. This had resulted in delayed registration with the Insolvency Service.