This was mainly due to a 20.3% jump in the number of Individual Voluntary Arrangements (IVAs). However, company liquidations in the second quarter of this year were down 6.9% on the previous quarter and also down 15.1% on the same quarter in 2013. This represents their lowest quarterly total since the start of 2008.
Bev Budsworth, managing director of The Debt Advisor commented:
“Today’s figures show that, aside from all the talk of economic recovery, it’s clear that people are really struggling, with a rate of personal insolvency not seen since summer 2012 – a time when we were just emerging from a double-dip recession.”
“We are also beginning to see an increasing amount of people coming under more pressure from their mortgage lenders. Banks are keen to migrate people over to repayment mortgages from interest only schemes to lessen the financial risk placed on themselves.
“Unfortunately, by doing this, people’s finances are simply falling over – already stretched, they are reaching breaking point with the additional cost of a repayment mortgage.
“While banks do need to reduce their risk, it seems the ‘treating customers fairly’ message is just not getting through for some lenders who don’t seem to care that customers have other debt commitments which they won’t be able to meet if their mortgage payments treble when they are converted from an interest only to a repayment mortgage - a problem that can only get worse if rates begin to rise."
