The number of people going bankrupt in England and Wales has plateaued over the last 2 years. This is somewhat of a surprise given the rise of 10% between 2017 and 2018.
Employment in the UK is currently at record highs. Although many of the jobs created are based around the zero hour contract “Gig economy” people seem to be keeping on top of their finances.
Having said that it should be remembered that the number of people starting an IVA (the formal alternative to Bankruptcy) continues to increase. There was a rise of 10% between 2018 and 19.
The numbers of bankruptcies and DROs has seen a dramatic fall in Q2 2020. This is likely to be the result of government handouts and loan payment holidays due to Corona Virus. This has supported people who would otherwise have used these solutions.
DRO Volumes stay the same in 2019
27,194 people started a DRO in 2019. This was almost exactly the same as the 2018 figure (27,420).
The reason for the stabilising numbers is likely the same as those for Bankruptcy described above. Record employment means that may people are keeping their heads above water debt wise.
The number of people who carry out a DRO in any particular quarter is traditionally higher than the number going bankrupt as it is a cheaper solution to implement. However 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.