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Latest figures: IVAs up 20%

The latest figures from the Insolvency Service, released this morning, show a considerable year-on-year increase in the number of people entering an IVA.

In the first quarter of 2010, 11,782 people in England and Wales entered an IVA - 20.1% more than the 9,807 who entered an IVA in the first quarter of 2009.

The number of bankruptcies actually shrank over the same time period. In Q1 2009, there were 20,446 bankruptcies in England and Wales, but by Q1 2010, this number had fallen to 18,256 (a fall of 10.7%).

So much for the year-on-year figures - the quarter-on-quarter figures tell a different story.

Looking at the difference between Q4 2009 and Q1 2010, the number of people entering an IVA actually fell from 13,219 (an all-time high) to 11,782.

And the number of bankruptcies rose from 17,007 to 18,256 between the last quarter of last year and the first quarter of this year.

Then there`s the third form of insolvency available to struggling borrowers in England and Wales - the DRO (Debt Relief Order).

DROs were only introduced in April last year, which means that so far, we`ve had no year-on-year figures for comparison. However, we have had four quarterly results, which reveal that the number of people entering a DRO has grown in every quarter since they were introduced - in the second quarter of 2009, there were 1,978, and in the first quarter of 2010, there were 5,644.

The Telegraph quoted Chris Nutting, a director at accountants KPMG, who said: "While Britain is technically out of recession, the harsh reality is that many people are still living beyond their means. History shows that personal insolvencies will continue to rise for some time after the recession finally ends.

"If, as predicted, the new government raise taxes and reduce public sector spending, a lot of people will need to take drastic action to resolve their financial problems, such as applying for bankruptcy."

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The IVA Advisory Centre are a licensed Insolvency Practice, offering free debt advice as well as IVAs and a comprehensive range of other debt solutions. If you are in debt and would like to explore your options, contact one of our advisers today.