South West bankruptcies soar by 73 per cent in last 12 months

A big increase in the number of bankruptcies in the South West represents a “worrying trend” as households continue to struggle with rising living costs, according to a Bristol insolvency expert.

The latest quarterly figures released  by the Insolvency Service reveal that while bankruptcies across Bristol, Bath, North Somerset and South Gloucestershire are down by around 16 per cent since the last quarter, they are 73 per cent up on the same period last year.

David Bridge, Bristol-based associate director in Evelyn Partners’ restructuring and recovery services team, said: “Year on year, there were 45 per cent more bankruptcies in the region in 2023 than in 2022, which is a worrying trend.

“Numbers for the quarter are highest in the Bristol and North Somerset areas (both 17), followed by South Glos (10) and BANES (8). This league table is mirrored over the previous 12 months.”

He added: “The personal statistics show that interestingly, despite significant volatility over the past few years, the total number of personal insolvencies is now broadly in line with pre-pandemic levels.

“Although Individual Voluntary Arrangement (IVA) numbers continue to fall, this drop is offset by increasing numbers of Debt Relief Orders (DROs) and Breathing Space applications.

“It is clear from the number of Breathing Space applications that this tool is providing a helpful moratorium for many people in financial difficulty. However, as we cannot see what follows the Breathing Space, it remains unclear whether this temporary relief from creditor action will provide the longer-term solution or simply delay a formal insolvency procedure.

“This could just be a sticking plaster that temporarily masks a high number of IVAs and bankruptcies that could follow later on.”

David Bridge continued: “As has been widely publicised, the cost-of-living crisis is impacting individuals nationally and across the region, with more and more people seeking help.

“Despite a recent drop, inflation remains high at 4.2 per cent. It will be interesting to see what the Bank of England does with the level of interest rates going forward.”