Between the years 2002 and 2005, Northern Ireland witnessed a trebling of insolvency cases with a rise in the number of people receiving individual voluntary arrangements (IVAs). Bankruptcies rose  from 334 cases to 821, while IVAs leapt from 207 to 633. And in 2006, the figures showed no signs of abating with nearly 2,000 people becoming insolvent. Now, after the toll of the credit crunch it's likely that figure has risen steeply.

Insolvency hit Record Levels 

2006 witnessed a new record in terms of the number of people who entered insolvency in England and Wales. 107,000 people became insolvent – a marked increase on the 67,500 who became insolvent the year before. Insolvency offers two paths, the most extreme being bankruptcy. Bankruptcy is a way to get rid of unmanageable debt, but you will lose your assets and home. An IVA is the preferred path for many, allowing you to hold onto your home and come to an arrangement or deal with your creditors to pay off a fraction of the debt over a number of years.

Rise in insolvency reflects increase in debt

Debt has always been an issue but in recent years insolvency problems have become increasingly worse. The high cost of housing and huge expense of a university education have taken their toll. The rise in insolvency is simply an overall reflection of the increase in debt in general. But it isn't just personal debt that is prompting a surge in insolvency. In April 2008, it was reported that insolvency in Northern Ireland was reaching its highest level for a decade for small businesses in the area. Although the number of company liquidations was low by overall UK standards, the 164 businesses that went insolvent is still the highest figure in the Province in the last decade.

Insolvency: challenging attitudes to failure

The figure is a worrying one in context, and in a small Province, every company that folds impacts heavily on the local job market and economy. There is also a concern that in the UK and Ireland, insolvency is seen as a mark of failure for a business with long-lasting negative consequences; whereas in America, insolvency and business failure is seen as a necessary learning curve, often leading to bigger and better things.

As insolvency becomes increasingly common, an attitude change is needed to help nurture a 'can-do' attitude – insolvency shouldn't be seen as the end of a financial future, but the start of financial rehabilitation.

Speak to Varden Nuttall About Insolvency

Varden Nuttall has been established for over 15 years and is dedicated to helping people in financial difficulty find a debt management solution through an Individual Voluntary Arrangement (IVA). Employing 90 people, including trained and skilled IVA administrators, we are one of the largest IVA companies in the UK and handle over 3% of all IVA applications. To find out more about the company, or to make an appointment to talk about putting an IVA in place, call us today on 0870 977 8100 or fill in our online enquiry form.