Insolvency 'more common than divorce'

12 April 2012

The struggle to pay off debts in the recession has made "financial breakdown" more common than divorce for the first time, official figures revealed today.

The number of people in England and Wales forced into insolvency rose by a quarter to a record 134,142 last year, one every four minutes.

By contrast the number of couples divorcing dropped sharply to 121,779, a 33-year low, according to the latest government statistics.

Experts blamed the insolvency landmark — equivalent to the adult population of a borough the size of Hammersmith & Fulham — on borrowers "living beyond their means" in the era of easy credit.

The total is made up of 74,670 bankruptcies, 47,641 Individual Voluntary Arrangements — a form of "bankruptcy lite" agreed between borrowers and their creditors — and 11,831 Debt Relief Orders, a scheme aimed at those with debts of less than £15,000.

Insolvency trade body R3 said nearly a million people were struggling with debts without seeking help.

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