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12/07/2013

Regional Individual Insolvency Statistics - R3 comments

Fall in individual insolvencies may mask informal insolvency problem - R3 comments on the regional personal insolvency statistics published by the Insolvency Service (12/07/13)

Louise Brittain, council member of insolvency trade body R3 says: “As with the national picture, the official figures show personal insolvencies falling across most regions. However, this does not necessarily mean that personal finances in England and Wales are getting better.”

“Our research shows debt worries remain high, and it is very likely that there are a significant number of people using informal debt repayment arrangements or Debt Management Plans, which are not covered by the Insolvency Service’s statistics. There needs to be a central register that keeps track of Debt Management Plans so that we can find out the true state of personal insolvency in the UK.”

R3’s latest Personal Debt Snapshot, an R3/ComRes survey of over 2,000 people (report due to be published this month) found that 50% of British adults were concerned about their current level of debt, up from 42% in February. 11% of those worried about their debts are worried about paying a Debt Management Plan.

Louise Brittain says: “Our concern is that the current rules on personal insolvency often make it difficult for people to use a formal insolvency process that is appropriate for their situation.”

“Frequently, insolvent individuals cannot afford the fees to enter bankruptcy, but they have too much debt or assets to qualify for alternatives like Debt Relief Orders. This leaves the debtor caught in the middle, exposed to their creditors. Action needs to be taken by the Government to reduce the number of people in this situation.”

“Individual Voluntary Arrangements offer an alternative solution. They do not have the same fee barrier as bankruptcy but they do have to be agreed by creditors, which can be easier said than done.”

Louise Brittain adds: “The North East and South West have long been individual insolvency hotspots. There is a particular problem with seaside towns, which have dominated the list of places in England and Wales with the highest rates of personal insolvencies.”

“Whereas seaside towns like Brighton have managed to diversify and adapt to the UK’s changing holiday habits over the past decades, other seaside towns have long been left behind. Many seaside economies are reliant on seasonal, minimum wage jobs in the tourism sector.”

Of the ten English and Welsh local authorities with the highest rates of individual insolvency, five are by the sea (Torbay (1), Scarborough (3), Blackpool (4), Hull (5), and Great Yarmouth (10)). A sixth, Denbighshire (2), is home to two more seaside towns, Rhyl and Prestatyn.

For more information, please contact:

Nick Cosgrove, Communications Manager R3

Nick.Cosgrove@R3.org.uk

0207 566 4215

 

Victoria Jonson, Director of Communications R3

Victoria.Jonson@R3.org.uk

0207 566 4223

 

Notes to editors (R3):

  • R3 is the trade body for Insolvency Professionals, and represents 97% of the UK’s Insolvency Practitioners.
  • R3 comments on a wide variety of personal and corporate insolvency issues. Contact the press office, or see www.r3.org.uk for further information.
  • R3 promotes best practice for professionals working with financially troubled individuals and businesses; all R3 members are regulated by one of nine recognised professional bodies.
  • R3 stands for ‘Rescue, Recovery, and Renewal’ and is also known as the Association of Business Recovery Professionals.

 

Notes to editors:

  • R3 is the trade body for Insolvency Professionals and represents the UK’s Insolvency Practitioners.

  • R3 comments on a wide variety of personal and corporate insolvency issues. Contact the press office, or see www.r3.org.uk for further information.

  • R3 promotes best practice for professionals working with financially troubled individuals and businesses; all R3 members are regulated by recognised professional bodies
     
  • R3 stands for 'Rescue, Recovery, and Renewal' and is also known as the Association of Business Recovery Professionals.