Menu
Finance
Cutting These 10 Everyday Expenses in 2014 Will Save You $8,844
How to Perfectly Plan Your Divorce to Protect Your Assets
PNC Bank Review – Overview of PNC Bank Accounts, Loans and More
Here’s Why Bank of America Just Closed Your Credit Card Without Telling You
2014 Academy Award Statue Valued at Just Under $400
Why You Could Start Seeing Your Credit Score on Your Credit Card Bills
How to Host Your Academy Awards Viewing Party on a Budget
Warren Buffett Reveals His No. 1 Investment Strategy That Anyone Can Follow
Your ATM’s OS is a Decade Old: Here’s Why Banks Are Scrambling to Update It
What You Need to Know About Obama’s $3.9 Trillion 2015 Budget
Discover What a Discover Bank Online Savings Account Can Do For You
4 Tips to Cut Your Monthly Bank Fees
Here’s Why One Analyst Says Bank Stocks Are Going to Double
How Ben Bernanke Earned $250,000 in 40 Minutes
Visa and MasterCard Join Forces to Protect Your Card from Hackers
Bankruptcy at lowest level since start of financial crisis
The rate of personal insolvency, where individuals are declared bankrupt or taking other legal measures to deal with their debts, has fallen to its lowest level since the start of the financial crisis.

Statistics published today by RSM Tenon, a firm of accountants and business consultants, suggest around 25,000 desperate borrowers resorted to personal insolvency in the first three months of 2013, the lowest level since early 2008 and a 16 per cent drop on a year earlier.

The company's Tracker report, which it calls an "early warning system", is published a day ahead of official figures from the Insolvency Service, part of the Department for Business, Innovation and Skills.

Full bankruptcies were down by 25 per cent to 6,850, while Individual Voluntary Arrangements (IVA), a watered down version, fell by 11 per cent.

The company said the real "surprise result" was an 8 per cent fall to 7,266 in Debt Relief Orders.

DROs are a lower-cost alternative to bankruptcy for people with debts of less than £15,000 and a monthly disposable income of less than £50. People can apply through an intermediary rather than going to court and pay a £90 fee, which can be paid in instalments.

Mark Sands, head of personal insolvency at RSM Tenon, said “The economy narrowly avoided a triple dip recession and the good news is that in the same quarter that the economy grew by 0.3 per cent personal insolvencies have fallen to their lowest level since early 2008.

"Record low interest rates have helped homeowners, a low level of new credit has avoided some of the over borrowing of the past and, despite many people feeling the pain of the downturn and the austerity measures, unemployment has not reached record levels and so more people than in previous recessions have been able to muddle through.

"The picture isn’t as rosy as the figures suggest, for many who have remained in employment even if they have permanent jobs. Rising costs, frozen salaries and wage cuts can still have an impact on family finances especially if they were in debt before the credit crunch.”

Debt management plans are informal arrangements made with creditors, usually via a third party which can take a hefty cut. It doesn't fall under the aegis of the Insolvency Act.

IVAs a watered down version of bankruptcy which usually require the individual to pay creditors over five years. It is effectively a debt management plan but requires three-quarters of the creditors to agree to it. The rest must abide by the terms of the plan.

Mr Sands added: "This shows that people are less confident about their long-term employment prospects. As over indebted consumers still cannot see any certainty in their monthly household budgets, I expect to see peaks and troughs throughout 2013.

"Also, if people with serious debt problems are mis-sold debt management plans, a less regulated alternative, IVAs will continue to fall. Nevertheless I forecast IVAs to remain around the 40,000 level for 2013.”

Menu
Hey Ladies: Don’t Miss Out on the Broke Boyfriend Tax Exemption
3 Ways to Fix Your Finances in One Hour for Daylight Saving Time
IRS Reports This Year’s Average Tax Refund is $3,034
How to Start Saving Money for Your Baby’s College Education
How to Find Free Tax Preparation in Your City
IRS Wants to Pay You $25,000 for Saving Your Tax Return
5 Secrets Your Bank Doesn’t Want You to Know
How to Handle the 5 Most Awkward Money Situations
4 Tips to Cut Your Monthly Phone and Cable Bills
Stop Wasting Money Because You Won’t Admit You’re Old
Amazon Prime Price Hike: Is It Worth It?
10 Tips for Winning Your March Madness Bracket and Some Extra Cash
I Lost My W-2! What Should I Do?
4 Cheap, Fun Ways to Celebrate St. Patrick’s Day
What Four Leaf Clovers and Interest Rates Today Have in Common
Name
Name

Password