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Fall in Insolvency Rates in England and Wales

Insolvency rates across England and Wales fell in 2011 after peaking at record levels in 2009.

Figures show that the amount of insolvencies per 10,000 adults in England and Wales fell to 27.1 in 2011 having risen from 7.2 in 2000 to a peak of 31.1 in 2009. These figures include bankruptcy orders, DROs and individual voluntary arrangements (IVAs.)

The North East has the highest rate of individual insolvencies with 35.2 per 10,000 adults. This was followed by the south-west and the east Midlands which both stood at 30.4 per 10,000 adults. The rate in London in 2011 was 17.5.

The Wansbeck area of Northumberland has officially been named the bankruptcy capital of England, in a list that also features parts of Cornwall and the seaside town of Eastbourne, considered well-heeled by many. Individual insolvency rate in Wansbeck is 57 per 10,000 adults.

Meanwhile, the City of London, which includes the flat-dwellers of the Barbican, tops the list of areas with fewest bankruptcies, closely followed by St Albans in Hertfordshire and affluent London boroughs such as Richmond upon Thames and Camden.

Latest regional statistics show the individual insolvency rate in Wansbeck, which includes the former mining towns of Ashington and Bedlington, is running at 57 per 10,000 adults, while in the City of London and St Albans the rates are four and 11 respectively.

The Insolvency Service also revealed that for England and Wales as a whole, nearly 60% of those going bankrupt are men – rising to 65% in London – while almost two-thirds of the people making use of debt relief orders (DROs) are women. A DRO is an option open to someone who can’t pay their debts but owes no more than £15,000 and has little in the way of assets or income. The figures show they are becoming an increasingly popular way of dealing with debt.

Wansbeck topped the table of current or former local authority areas for bankruptcies, with the rate running at 19 per 10,000 adults. That compares with 2.6 for the City of London, 4.6 for St Albans, and 4.7 for the London boroughs of Wandsworth and Richmond upon Thames.

When it comes to DROs the Penwith area of Cornwall, which includes Penzance and St Ives, and Scarborough top the table, while for IVAs, Tamworth in Staffordshire and Wansbeck have the highest rates.

Overall, the past three years have seen a fall in the number of bankruptcy orders, while DROs, which were introduced in 2009, have become increasingly popular. While these are aimed at providing a “cheap and accessible” form of debt relief, the Insolvency Service said:

“They should not be seen as an easy option for resolving your debt problems.”

Looking at the regions, the Insolvency Service said:

“The bankruptcy rate was highest in the north-east, followed by the east Midlands and the south-west. For DROs, the highest rate was in the south-west … London, however, remained the region with the lowest rate per 10,000 adults across each type of individual insolvency procedure.”

Source: Debt Collection News