New figures were released today by the Accountant In Bankruptcy and have shown a decrease in the number of protected trust deeds granted in the previous quarter of 2010/2011.
The new statistics have shown a drop of 25% in trust deeds granted compared with the previous quarter. The fall in trust deeds being grant seems to be linked to the rise in certificate of sequestrations which was introduced in November 2010. Bankruptcy was also on the rise within the last quarter with 2,687 people being awarded bankruptcy through a range of different routes, these can be broken into;
2,173 Awarded from debt applications
445 Creditor Petitions to the court
68 Petitions by the trustee in a Trust Deed
There was also a rise in legally binding debt management solutions such as, D.A.S (Debt Arrangement Scheme) with 478 approved. This is up 9% on the previous quarter and 15% compared with the previous year.
The LILA debt solution has also decreased by 12% to 1,204 compared with 1,368 in the 3rd quarter of 2010/2011.
From the the chart below we can the the increase in sequestrations (bankruptcy) and the decrease of protected trust deeds. The new trust deeds statistics are the lowest in over 5 years and while sequestration may have increased from the previous quarter they are the second lowest figures in over 5 years.
From this above chart we can see a decline in traditional sequestration (bankruptcy) since the new route to bankruptcy called LILA (Low Income Low Asset) was introduced. LILA is a route into bankruptcy however it is a simplified form for people who have limited income and little or no assets. This is the reason there was an increase in sequestration when LILA was introduced in the first quarter 1 of 2008/2009. It would appear that this continued decline in personal insolvency is good new for the economy as it will mean that people are beginning to be able to pay back what they owe. The unfortunate news is that there is still a long way to go before we will back back at the levels of 2006/2007. This is a good sign that things are getting better but it will probably take more before we are economically safe again.
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