Commentary on Declining IVA Numbers

INDIVIDUAL INSOLVENCIES

From data gathered by The Insolvency Service and issued on the website insolvency Gov Uk there were 26,072 personal insolvencies in England and Wales in the third quarter of 2007.

This was a fall of 3.0% when compared to the previous quarter and a fall of 5.0% when compared to the same period a year ago.

The 26,072 Personal insolvencies comprised:

• 15,833 bankruptcies, a fall of 2.1% on the previous quarter but an increase of 2.2% on the corresponding quarter of the previous year; and
• 10,239 Individual Voluntary Arrangements (IVAs), a fall of 4.3% on the previous quarter and a decrease of 14.3% on the corresponding quarter of the previous year.

Based that Bankruptcies have remained fairly static this implies that there must be another reason for the decline in IVAs other than fall in demand?

Although it may be argued that people who may have previously have entered into an IVA may now be opting for Bankruptcy?

The real reason however for the decline would seem to be the continued negotiations for IVA standards and lower fees that is currently taking place between the Debt Resolution Forum and the main Banks and Creditors represented by the BBA (British Bankers Association) that has seen a dramatic rise in rejection rates of IVA's that in previous months would have been accepted.

Hopefully these issues will soon reach an amicable agreement so that the consumer is not caught in the cross-fire.

Release Schedule of Insolvency Statistics from Insolvency Gov UK

• First Friday in February (Q4 Statistics)
• First Friday in May (Q1 Statistics)
• First Friday in August (Q2 Statistics)
• First Friday in November (Q3 Statistics)

The next release will be: Friday 1 February 2008 @ 9.30am

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Insolvency Service Statistics