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|‘Clear evidence’ that changes to Debt Relief Orders are working|
|Friday, 29 January 2016|
Insolvency Service statistics released today show there were 20,404 individual insolvencies in England and Wales in Q4 2015, up 3.6 percent on the previous quarter but down 10.5 percent on the same quarter in 2014.
The quarter-on-quarter rise has been driven to an increase in the use of Debt Relief Orders (DROs), a form of insolvency designed for people with low incomes, few assets and relatively small debts, after changes to eligibility criteria took effect in October. DROs are now available to people with up to £20,000 debt (previously £15,000) and £1,000 in assets (previously £300).
There were 6,501 DROs in Q4, up 15.5 percent on the previous quarter. A quarter of these (1,629) were for individuals with debts higher than the previous limit of £15,000.
Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline, said: “These figures are clear evidence that recent changes to the eligibility criteria for Debt Relief Orders are working, and this is good news for people in financial difficulty. With this important option now available to more people who are struggling with problem debt, the changes are helping us to help more people back on the path to financial health.
“We hope that these changes will come to be seen as a good first step towards the wider review of debt solutions that we have long been calling for. We have to ensure that a viable debt solution is made available to every single person struggling to repay what they owe, and that no-one is allowed to fall through the cracks of a system that has evolved organically over several decades.
“Anyone who is struggling to cope with debt should seek free advice from a charity-run service like National Debtline as soon as possible.”
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