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Insolvencies: some groups worse off than others

Credit reference agency Experian has looked into the recent insolvency figures and 'broken them down' by group, showing us which parts of society have been more - or less - likely to enter insolvency as a result of their debt problems. Insolvencynews.com reports.

The agency found that those who've 'created comfortable lifestyles on council estates' are statistically most likely to have entered insolvency in the second quarter of this year (April - June).

This group, which Experian called the 'council community' group, was typically made up of people who'd bought their council houses through the Right to Buy scheme. Altogether, people in this group made up nearly 15% of all personal insolvencies in the UK - more than any other group.

Other groups did noticeably better than they did in previous quarters, such as the group called 'liberal opinions'. These people, 'young and well educated', saw the greatest improvement in insolvency numbers. Although 1,913 of them became insolvent over a three-month period, this was a major reduction (of 26%) on the number recorded a year ago.

And younger people 'on limited incomes living in council accommodation' saw quite an improvement as well. This was called the 'upper-floor living' group, and 1,884 people from this group were declared insolvent in the second quarter of the year, which means there was a 22% drop on the same period last year.

According to the Insolvency Service, a total of 36,584 people were declared insolvent across the UK in the second quarter of the year.

These days, of course, 'insolvency' means a lot more than just 'bankruptcy'. There are different forms of insolvency that have been introduced in an attempt to bring the benefits of insolvency to people who can't / won't enter bankruptcy for one reason or another.

So, depending on their circumstances, people could end up entering insolvency through bankruptcy, an IVA (Individual Voluntary Arrangement), a Trust Deed or a DRO (Debt Relief Order).

The question of where someone lives is also an important factor - someone in Scotland, for instance, wouldn't be able to enter an IVA, but might find that a Trust Deed is the best possible answer to their debt problems.