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The number of individuals entering a personal insolvency procedure has dropped to 26,390 its lowest quarterly level since Q3 2020.
Figures from the Insolvency Service, reveal that 1,826 people entered bankruptcy, 7,106 entered a debt relief order and 17,458 entered an individual voluntary arrangement in Q2 2023.
IVA numbers were down 12% compared with the previous quarter and dropped 22% when compared to the same quarter in 2022.
For the second quarter running, DRO numbers broke the 7,000 barrier, increasing 1% in the period and by 23% when compared to the same quarter in 2022.
However, bankruptcy numbers rose for the second successive quarter and recorded the highest number since Q4 2021.
Andy Nalliah, personal insolvency partner at RSM UK, said: “IVA registrations have dropped significantly when compared against both the previous quarter and the same quarter last year. This could suggest the pandemic trend of higher-than-normal IVA registrations is now slowing.
“Furthermore, despite a recent slowdown in inflation, energy prices and the cost of groceries, the drop in IVAs could reflect the debtor’s lack of confidence in their own ability to service the financial commitments associated with an IVA.”
He added: “‘Many people will be starting to feel the bite of hiked interest rates as their fixed term mortgages come to an end and this could be a key driver behind the 22% drop in IVAs compared to the same quarter last year.
“On the flip side, albeit on a lesser scale, bankruptcy numbers have risen by 4% in the quarter and by 11% when compared to the same quarter last year. This is a further sign of creditors acting upon their previously re-evaluated credit and debt recovery strategies.
