The number of individuals entering a personal insolvency procedure has risen for the third successive quarter in Q2 2024. Whilst bankruptcy and individual voluntary arrangement (IVA) numbers dropped in the period when compared to the previous quarter, DRO registrations in the quarter rose by 39%, fuelling the increase in personal insolvency numbers.

The seasonally adjusted figures, released today by the Insolvency Service, reveal that there were 29,489 individuals entering either bankruptcy (1,935), DRO (11,699) or IVA (15,855) in Q2 2024.

Following the first decrease in six quarters in Q2 2024, DRO registrations increased in the period and by an even greater amount when compared to the same quarter in 2023, with a 63% increase in registrations.

Bankruptcy numbers decreased by 10% quarter on quarter albeit the quarterly registrations rose by 4% when compared to the same quarter last year.

Commenting on this, RSM UK personal insolvency partner, Andy Nalliah, said: “Whilst it is not surprising, it is encouraging that the trend for rising numbers of DRO registrations continues as Q2 2024 saw the highest quarterly amount of DROs on record. This trend is expected to continue now that a consumers’ access to DROs has improved due to the abolishment of the entry fee and the significant increase in entry level thresholds for debt levels and assets.

“In the immediate term, decreases in the quarterly numbers for bankruptcies and IVAs are expected, as many debtors whose circumstances may previously have resulted in a bankruptcy or IVA, are now able to proactively seek and enter a DRO. IVA numbers remain strong, despite the rise in DROs, albeit registrations have dropped 3% in the quarter when compared to Q1 of 2024. Furthermore, they have also fallen 7% when compared to Q2 2023.

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“For the first time in four quarters, bankruptcy numbers dropped below 2,000 despite recording 4% more than in the same quarter last year. In actual terms, the reduction represents a decrease of 223 bankruptcies in the period which equates to a 10% quarter on quarter drop. This is not surprising given the trajectory of DROs and, in all likelihood, those debtors who are now entering DROs as opposed to bankruptcy are likely to represent minimal asset cases.

“Despite the drop in bankruptcy numbers, creditor petitions remain high and were responsible for 20% of the bankruptcies in the quarter; a 1% increase on the previous quarter. This continues to speak for the changed attitudes of creditors whose collective approach appears to have shifted to those seen prior to the pandemic.”