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Commercial Credit News
|More people benefit from Debt Relief Orders|
|Friday, 29 April 2016|
Insolvency Service statistics released today show there 20,383 individual insolvencies in England and Wales in Q1, up 0.3 percent on the previous quarter but down 2.2 percent on the same quarter in 2015. The overall rate of insolvency has fallen to 0.17 percent of the population, its lowest rate since the end of 2005.
The overall rise this quarter has been driven by a continued increase in 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 2015. DROs are now available to people with up to £20,000 debt (previously £15,000) and £1,000 in assets (previously £300).
There were 6,722 DROs in Q1, an increase of 8.2 percent on the same quarter last year. Around a quarter 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: “For once, this slight rise in insolvencies isn’t all bad news – as these figures confirm that recent changes to Debt Relief Orders are working, helping thousands of additional people who previously had no way of resolving their financial difficulty.
“There is still a need, however, for a full review of the options available to people struggling with debt. We have to make sure that anyone, in any situation, can access an option that can help them resolve their financial difficulty – 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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