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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
2020 4,5852,4402,781 2,819 12,625
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
20129,1328,0927,642 6,921 31,787
2011 12,539 11,1019,5788,658 41,876
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The big question is whether this trend will reverse when Government support is withdrawn.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.

Debt Relief Order Statistics Table

Qtr 1Qtr 2Qtr 3Qtr 4Total

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.

However not everyone can use this solution. There are strict qualification criteria which prevent many people from using this solution.

A DRO is only possible if your total debt is £20,000 or less, you are not home owner, your car is worth less than £1000 and your surplus income is less than £50/mth.

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