Insolvencies on the decrease

The number of people declared insolvent in England and Wales has fallen by eight per cent during the past year despite the impact of the credit crunch, figures from the Insolvency Service show.

A total of 24,553 people went insolvent during the period, two per cent fewer than during the first quarter of the year and 8.3 per cent less than in the same period of 2007.

Within the total, there were falls in both the number of people going bankrupt and the number taking out individual voluntary arrangements (IVAs), under which interest on debt is frozen in exchange for a set amount being repaid each month.

Charles Turner, director of personal insolvency at PricewaterhouseCoopers, said: "I'm not particularly surprised that the numbers have fallen a little.

"I think the trickle-down effect of the credit crunch hasn't really hit bankruptcy and IVA numbers 'big style' yet."

But he said he expected the figures to begin increasing again over the next six to 12 months.

"People have been less able to borrow from mortgage providers on a secured basis and they have been forced to turn to unsecured borrowing to fund necessities, which will feed through into the personal insolvency numbers over the longer term, but will not be instantaneous."

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