Personal insolvencies on the rise

Personal insolvencies are on the rise across the UK, affecting more woman than men according to new figures.

Research by the trade body R3 has shown insolvencies among women has risen from 30% in 2000 to 54.3% last year.

Debt relief orders

The increase was revealed after the way insolvencies are recorded. The figures no longer consist of just declared bankruptcies but now include debt relief orders, which are heavily weighted towards women.

To be declared bankrupt an individual must owe a creditor at least £5,000 and the creditor has to apply for bankruptcy to be declared. or you can apply to be made bankrupt yourself, costing £680 in up-front government and court fees for online applications.

An individual with under £1,000 in assets and debts below £20,000 can enter a debt relief order (DRO) themselves for £90 with the debts being frozen and then cancelled at the end of the 12 month process if your financial position hasn’t changed.

Sober reminder

R3 spokesman Mark Sands said: “The gender split in insolvency is a sober reminder that women are more likely to be economically disadvantaged than men; they are more likely to work part-time, or in generally lower paid sectors.

“Women are also more prone to becoming insolvent following the breakdown of a relationship than men, as the Insolvency Service found several years ago when it looked into the reasons why people became bankrupt.

Being a single parent also correlates strongly with financial hardship, and women make up the great majority of single parents.

More common

“The introduction of DROs is a major reason why women reversed the gender gap in insolvencies.

DROs are more common than bankruptcies – albeit far less well-known – and the gender split of people entering DROs is heavily weighted towards women.

“This links back to the generally more precarious state of women’s finances, as DROs are used for smaller debt and asset levels than other personal insolvency procedures.”

Highest rates

The highest rates of insolvency are concentrated among seaside towns or are in the north of the country.

The top 10 highest rates in England and Wales per 10,00 adults are:

  • Stoke-on-Trent 51.9
  • Scarborough 47.8
  • Torbay 45.7
  • Plymouth 45.2
  • Kingston upon Hull 44.9
  • Blackpool 43.8
  • Corby 42.1
  • Burnley 40.4
  • Barnsley 39.9
  • Stockton-on-Tees 39.8

The top 10 lowest rates are all in the south:

  • Kensington and Chelsea 9.9
  • Mole Valley 9.9
  • Camden 10.0
  • Westminster 10.2
  • Wandsworth 10.5
  • Harrow 11.3
  • Richmond upon Thames 11.6
  • Epsom and Ewell 11.7
  • Brent 12.2
  • St Albans 12.4