Growth in personal insolvencies (bankruptcies and IVAs) has been dramatic over the past decades in UK.
It has been fuelled by the availability in credit and economic factors such as unemployment/ under employment.
UK household debt now in excess of £1.3 trillion of which about £0.2 trillion is unsecured.
Levelling off in 2007 could be construed that the economy is strengthening – I fear that this is not the case – Rather it is a function of certain creditors seeking to restrict access to statutory available solutions.
Certain creditors and lending institutions have been rejecting debtors’ proposed Individual Voluntary Arrangements. Often these rejections have despite being contrary to commercial rationale or indeed common sense.
It has led the government’s Insolvency Service to warn that it will result in increased bankruptcies.
In Northern Ireland there has been a downturn in reported personal insolvencies and whilst there are economic factors at play such as the dramatic growth in house prices which have pulled people out of financial difficulties they may otherwise have faced – the facts remain:
- more individuals than ever before are seeking debt advice
- the levels of debt as a proportion of household income have never been higher