The number of personal insolvency declarations reached an all time peak in 2010.
The Insolvency Service reveals that there were 135,089 separate cases of people declaring themselves insolvent last year. This is the highest figure since the beginning of such records, dating back to 1960.
The figure refers to insolvencies in England and Wales. Although the number of cases reached a record high, the total actually fell during the last quarter. In comparison with the last three months of 2009, there were 13.6% fewer insolvencies.
The total for 2010 was an increase of 0.7% from that of 2009, and twice the number in 2005.
Also on the decline in 2010 was the total number of companies making declarations of insolvency, which was 23% down on 2009.
The decline during the last three months of 2010 can be attributed to adverse weather conditions, resulting in fewer people being able to attend court hearings; money lenders adopting a more considerate attitude due to the holiday season; and procrastination – people avoiding the issue of insolvency until the incoming of 2011.
Individual Voluntary Arrangements (IVAs) grew by 6.5% in 2010 with a figure of 50,716. IVAs have less of a stigma attached to them, and allow for an agreement between debtor and creditors.
Last year also saw a total of 25,179 Debt Relief Orders. Since their inception in spring 2009, Debt Relief Orders allow people to manage smaller debts of £15,000 and under to evade bankruptcy.
The more established route of bankruptcy was opted for by significantly fewer people in 2010. The total number declaring bankruptcy was 59,194; 20.7% lower than the preceding year.