Personal Insolvencies continue to fall

sjaypink

I wouldn't say that ability to repay debts has increased though, and surely thats the point.

Interest in BR is still high IMO, but its amazing how many people either think its free :cool:, or have no idea of the cost. It is a lot of money to come up with in one go for someone who, mostly, finds it difficult to budget and save.

There are so many people struggling on with either no intention, or no expectation, to ever clear their debts.
As LJ says, DROs are relatively new, so skew longer term BR stats.
Then there are also IVAs, consolidated orders etc.
Think how many people are paying off £20+k at £10 per month....
Also with unsecured debts its quite easy to just 'move on' and never pay them.

I would say that the 'debt written off' figures would be more telling, but I guess debts being -tokenly (is that a word?! )- paid under IVAs, cOs and the like would not be included in those figures.

julieq

Generali wrote: »

It is true to say that insolvencies have fallen back in the last quarter but it's going against a trend going back pretty much to the Labour Government getting in.

It is startling the extent to which insolvency in all forms has risen since the late 1990s. I wonder to what extent the drop in insolvency has coincided with the unavailability of credit over the past 3 years. After all, if you can't borrow you can't go bust!

The first point is true obviously, but a lot of that can be traced back to the change in rules around bankruptcy which make it an easier option.

The point really isn't around the fact that some people get into financial trouble by accident or carelessness, its that if the effects are reduced then credit cost less for everyone else. The insolvency rates aren't causing big problems in the banking system, i.e. the risks are being costed and managed appropriately.