More evidence of rising debts amongst UK households comes as studies suggest the numbers of County Court Judgements (CCJs) and Individual Voluntary Arrangements (IVAs) have reached record highs.
There were 1,150,000 CCJs handed out by UK courts in 2019, up by 3% from the previous year. The figure is also around double the number of judgements issued in 2012.
The mean average value of the CCJs imposed during the year was £1,506, 5% higher than in 2018; and the median average value was up 14% to £672.
The CCJ figures were released by the Registry Trust, which collects data for the Ministry of Justice.
Mick McAteer, the chair of the Registry Trust, noted that the number of individuals experiencing problem debt appears to be rising even though interest rates remain low. Mr McAteer said:
“Low interest rates have cushioned the impact of debt levels on the typical household, but it conceals the fact that large numbers of more financially vulnerable consumers are facing real financial strain for a number of reasons.”
He also suggested that organisations such as local authorities, utilities and debt collectors were now more willing to go to court to obtain a CCJ for small levels of arrears.
Almost 78,000 IVAs commenced during 2019, representing a rise of 10% when compared to the previous year and an increase of more than a third from the 2010 figure.
Many consumers have also been in their IVA for a number of years, with figures from the Insolvency Service showing that 7.8% of the arrangements registered in 2012 were still in force, as of the end of 2019.
The number of individuals entering some form of insolvency rose by 6% between 2018 and 2019. This increase is almost entirely due to the increase in IVAs, with bankruptcies rising by a small amount during the year and the number of debt relief orders falling slightly. The IVA option appears to be growing in popularity, as IVAs comprised 63.8% of total individual insolvencies in 2019, the fourth consecutive year in which this figure has increased.
There were also increases in the number of IVAs which fail within 12 months, two years and three years.
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