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Bankruptcy and DRO statistics and analysis
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Bankruptcy and DRO statistics and analysis

Bankruptcy and DRO statistics and analysis

During 2020 there was a 25% reduction in people going bankrupt (compared to 2019). There was a similar reduction in the number of people starting a Debt Relief Order

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In 2020 just under 33,000 people in total went bankrupt or started a Debt Relief Order in England & Wales. This was a 25% reduction compared to 2019 where the number was just under 44,000.

Bankruptcy Statistics Table

  Qtr 1 Qtr 2 Qtr 3 Qtr 4 Total
20212,8012,2895,090
2020 4,5852,4412,784 2,844 12,654
20194,4694,2354,1783,86016,742
20184,3484,1084,2083,94016,640
20174,0833,7223,7373,563 15,105
20163,7753,7093,9363,624 15,044
20154,4043,975 3,896 3,570 15,845
2014 5,681 5,4754,907 4,282 20,345
2013 6,673 6,480 6,0095,409 24,571
20128,1328,0927,642 6,921 31,787
2011 11,965 11,1079,7149,142 41,928
2010 18,25614,98213,907 12,028 59,173
2009 20,446 18,87018,34717,007 74,670

Source: The Insolvency Service Official Statistics

Bankruptcy numbers analysis

The numbers of people going bankrupt was rising during 2018 and 19 compared to previous years. However in 2020 there was a dramatic fall.

The most plausible explanation for this is Covid 19 and the associated Government support. Any drop in individual incomes due to furlough seems to have been more than offset by the access to financial assistance schemes such as mortgage and loan payment holidays.

The big question is whether this trend will reverse when Government support is withdrawn. Job losses and unemployment may start to increase once this happens (as some are predicting). If so, the number of people in need of assistance with their debt may well begin to rise again.

Currently in 2021 it seems that a similar number of people are going bankrupt as did in 2020. However, it will be some time before any realistic analysis can be undertaken given the furlough scheme is not due to finish until the end of September 2021.

Debt Relief Order Statistics Table

Qtr 1Qtr 2Qtr 3Qtr 4Total
20214,1614,3678,528
20206,9164,8204,4894,24420,469
20196,9466,7966,7886,93727,476
20186,4786,9596,9247,06127,421
20176,1196,1466,2746,35524,894
20166,7226,7416,4906,24326,196
20156,2135,8325,6296,50124,175
20146,5497,0066,8086,32526,688
20137,2197,1326,6326,56327,546
20127,8977,9567,7777,54931,179
20116,7887,2587,6047,35929,009
20105,6446,2957,0686,17225,179
200901,9784,5055,34811,831

Source: The Insolvency Service Official Statistics

Debt Relief Order numbers analysis

In 2020, approximately 25% less people started a Debt Relief Order (DRO) than in 2019.

As with bankruptcy, this is a direct result of the financial assistance from Government and financial institutions due to the coronavirus pandemic.

The number of people who carry out a DRO in any particular quarter is traditionally higher than the number going bankrupt. It is far a cheaper solution to implement.

The relatively strict qualification criteria for a DRO will be relaxed at the end of June 2021. This may lead to an increase in the number of people using this solution as it becomes more accessible.

It is still too soon to say whether the relaxation of the DRO qualification criteria from 1st July 2021 will lead to a significant increase in the number of people using this solution.

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