Insolvency at a glance in England & Wales

In recent years, people all over the country have had a harder time than ever managing their finances.

Although it's been recently announced that the UK is now out of recession - with the economy returning to growth - there's still a whole raft of financial pressures weighing on the average person's finances from month to month.

Stagnant wages, benefit cuts, rising bills, growing debts: all these things are causing many people to feel the pinch. For people repaying debts, a squeezed income can also increase the likelihood of debt problems - which could lead to anything from extra fees & charges to legal action from lenders (or even extreme consequences like bankruptcy or repossession).

Anyone struggling to repay their debts should get some expert advice as quickly as possible, to stop the problem getting any worse and to find a way of getting their finances back on track.

However, for borrowers who've already fallen into more serious debt troubles, entering an insolvency solution may be the best answer to the situation.

Between April and June 2012, 33,787 people in the UK were made insolvent - whether that was by entering an IVA (Individual Voluntary Arrangement), a Trust Deed, a DRO (Debt Relief Order) or bankruptcy.

Gregory Pennington has created an interactive insolvency map, providing a picture of insolvency levels across the UK. Let's take a look at insolvency figures region by region.

A look at insolvency across the regions

London, with a population of 8.2 million, had 10,803 personal insolvencies between April and June 2012 - the fewest personal insolvencies per head in that period throughout England and Wales.

However, London also had the highest average household debt by a long way - £33,168 per family, not including mortgages - according to the Aviva Family Finances Report August 2012.

At the opposite end of the scale, the North East had the most personal insolvencies per head - totalling 7,319. The region also had the most IVAs (3,045) and bankruptcies (2,367) per head, and the second-highest number of DROs (1,907).

Yet looking at average household debt, families in the North East typically owed £5,842 - the fourth-lowest amount.

In Wales (population: 3 million), there were 6,968 personal insolvencies recorded in those same three months. This total broke down into: 2,424 bankruptcies, 2,796 IVAs and 1,748 DROs.

Entering insolvency is by no means an 'easy' way out of debt, but for some people it can be the best way of dealing with the problem, even though insolvency:

  • • Will have an effect on their credit rating for six years
  • • Can mean homeowners have to release equity from their property (IVAs and Trust Deeds)
  • • Can actually cost them their home (in the case of bankruptcy)

However, insolvency isn't the only way of dealing with debt problems. If action is taken early enough, borrowers may be able to agree an alternative way of repaying their debts that doesn't involve insolvency.

You could speak to us today for some expert debt advice.

Daniel Culpan

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