The latest monthly figures from the Insolvency Service have indicated that personal insolvency numbers across England & Wales fell by 7.8% to 9,079 in July 2021 compared to June’s figure of 9,848, and were 23.8% higher than July 2020’s figure of 7,335.
There 620 bankruptcies were registered, which was 34% lower than July 2020 and 58% lower than July 2019. The bankruptcies were made up of 534 debtor applications and 86 creditor petitions.
Bankruptcies were 34% lower than in July 2020 driven mainly by a drop in debtor applications (37% lower), to their lowest monthly number in the series. The number of creditor petitions were similar to July 2020. Compared to July 2019, total bankruptcies were 58% lower; debtor applications were 54% lower and creditor petitions were 71% lower.
Debt Relief Orders (DROs) were at their highest level since the start of the pandemic, with 1,864 DROs registered, following changes to the eligibility criteria on 29th June including an increase in the level of debt at which people can apply for a DRO from £20,000 to £30,000. The number of DROs registered was 15% higher than July 2020 but remained lower than pre-pandemic levels (22% lower than in July 2019).
There were, on average, 6,841 IVAs registered per month in the three-month period ending July 2021, which is 7% lower than both the three-month period ending July 2020 and the three-month period ending July 2019.
Between the launch of the Breathing Space scheme on 4th May 2021, and 31st July 2021, there were 17,297 registrations, comprised of 17,098 Standard breathing space registrations and 199 Mental Health breathing space registrations.
Colin Haig, President of insolvency and restructuring trade body R3 and Head of Restructuring at Azets said. “On the personal insolvency side, the month-on-month fall shown in the figures published today was as a result of a fall in Bankruptcies and Individual Voluntary Arrangements, although Debt Relief Order numbers increased.”
“It’s worth highlighting that this is the third consecutive month where personal insolvency levels have increased year on year, which shows the toll the pandemic is taking on people’s finances in England and Wales.”