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14 August, 2020 Open access

Individual bankruptcies and DROs fell by around 30 per cent in July 2020 compared to same month last year

Insolvency Service highlights that reduction is likely to be at least in part due to enhanced support measures introduced by the government in response to the COVID-19

The number of individual bankruptcies and debt relief orders (DROs) fell by around 30 per cent in July 2020 compared to the same month last year, according to new Insolvency Service statistics.

In the fourth set of experimental monthly statistics on company and individual insolvencies, compiled in response to the coronavirus (COVID-19) pandemic, the Insolvency Service highlights that in July 2020 the number of debt relief orders totalled 1,621, which was 31 per cent lower than in July 2019, and debtor bankruptcies totalled 849, which was 27 per cent lower than last year’s figure.

While the Insolvency Service advises caution in comparing monthly data over time, because the data has not been seasonally adjusted, it advises that -

‘The fall in DROs and debtor bankruptcies corresponds with a reduction in applications for these services, which coincided with the announcement of enhanced government financial support for individuals and businesses since the emergence of the coronavirus pandemic.’

In addition, the figures show that there were, on average, 7,322 individual voluntary arrangements (IVAs) registered in each of the three months ending July 2020, the same rolling three-month average observed in the period ending July 2019. However, the Insolvency Service advises that this figure will have been inflated due to technical issues experienced by one IVA provider, with approximately 4,950 IVAs registered in May 2020 that would otherwise have been registered between December 2019 and March 2020.

For more information, see Monthly Insolvency Statistics July 2020 from gov.uk