Rise in personal insolvencies in Ashfield

The figures come as Citizens Advice warns people are at risk of “spiralling into debt” amid the cost-of-living crisis.

A person becomes insolvent when they are unable to pay their debts and are left with a choice of declaring bankruptcy, or taking on measures to pay them back.

New figures from the Insolvency Service show there were 363 personal insolvencies in Ashfield over 2022, up from 341 in 2021 and 307 before the coronavirus pandemic in 2019.

Across Nottinghamshire, there were 1,832 in 2022, up from 1,775 in 2021 and 1,777 in 2019.

The same figures show across England and Wales there were 119,000 insolvencies in 2022, up from 110,000 the year before, but down from a peak of 122,000 in 2019.

Morgan Wild, Citizens Advice head of policy, said: “The cost-of-living crisis is far from over. We’re seeing huge numbers of people under significant financial pressure, with many at risk of spiralling into debt.”

While bankruptcies have declined nationally in recent years, from nearly 17,000 in 2019 to under 7,000 in 2022, there have been an increasing number of Individual Voluntary Arrangements, which can involve high fees from private providers.

IVAs involve a person in debt agreeing to a repayment plan with their creditor, who may agree to reduce or stop interest payments over the period.

In Nottinghamshire, 1,409 IVAs were granted in 2022, including 294 in Ashfield, along with 86 declarations of bankruptcy, including eight in Ashfield.

In May 2021, the Government launched its Debt Respite Scheme, which saw people unable to pay debts become eligible for a “breathing space” where creditors cannot pursue legal action against them for a set period while they sort their finances.

Across England and Wales, nearly 112,000 registrations have been made for a breathing space since the scheme launched, including 1,462 in Nottinghamshire, with 271 in Ashfield.

StepChange, a debt charity that administers breathing spaces, said the scheme has broadly been a success, but would like to see the grace period extended.

A Insolvency Service spokesman said: “Ensuring individuals in financial difficulty have access to effective solutions remains one of our top priorities and that is why costs for administering personal insolvency procedures are kept to a minimum.”