A record number of people were declared insolvent in England and Wales in 2010 although the number of new cases fell in the last three months of the year.
There were 135,089 people declared insolvent last year, said the Insolvency Service. However, there was a 13.6% drop in the last quarter of the year compared with the same period in 2009.
Money problems
The record number of personal insolvencies for the whole of 2010, which was double the number in 2005, came despite a drop in the final quarter of the year when 30,729 individuals were declared insolvent.
Experts suggested this fall at the end of the year was the result of fewer people being able to attend court proceedings owing to the weather, a more sympathetic attitude from lenders, and people putting off insolvency until the beginning of 2011.
Compared with the last recession in the early 1990s, the latest figures show a very different picture.
The number of individual insolvencies has shot up in the past decade, and now far outstrip the numbers seen in 1992 and 1993 of about 37,000 each year, although it is easier now to be declared bankrupt.
Debt Solutions Advice
The latest figures come in the same week as it was revealed that some specialist debt advisers have stopped taking new cases.
For the past five years, the £25m-a-year Financial Inclusion Fund has been paying for about 500 specialists in England and Wales to give free advice.
But the cash is due to run out in March and the government has confirmed it will not renew the fund. AnchorThis Fund was used to pay the costs of up to 500 debt advisers, operating out of Citizens Advice Bureau (CAB) offices across the country. The CAB was already steeling itself for a substantial reduction in its funding through charitable donations and money from both local and central government, as local councils announce their plans to address the cuts imposed upon them.
The impact of the drop in funding could mean the removal of up to 900 jobs at the CAB, while some offices will close completely, causing a devastating impact on local communities, which rely heavily on the support of the CAB for advice and assistance.
Some experts suggest people’s money problems are likely to continue for the foreseeable future.
