Insolvency figures suggest real fall in demand

New figures from the Insolvency Service suggest that there has been a real fall in demand for insolvency solutions.

 The Service reported that there were 27,390 individual insolvencies in England and Wales in the second quarter of 2012, down 10.2% on the same period a year ago.

The total was made up of 8,088 bankruptcies (down 27.1% on the same period last year), 7,956 Debt Relief Orders (DROs) (up 9.6% on the same period last year) and 11,346 Individual Voluntary Arrangements (IVAs) (down 6.6% on the same period last year).

David Rodger, managing director of national debt charity Debt Advice Foundation, commented:  “We welcome the fall in IVA volumes - this is the first time in five years that the second quarter has not seen significantly higher volumes than quarter one. 

 “Generally seasonal demand working its way through the system would result in higher numbers in the second quarter.  So this points to a real fall in demand for insolvency solutions.

 “However, we believe that the issue of bankruptcy fees remains the real story. The cost of bankruptcy has risen by 40% in two years and is now £700.  By comparison, a DRO costs just £90 while in many cases IVAs have no upfront costs at all.”

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