The Insolvency Service statistics for the first quarter were released today which show a rise in both bankruptcy and Individual Voluntary Arrangements but a drop compared to the same period last year.

The numbers show that for the first quarter of 2008 there were 25,264 individual insolvencies which was an increase of 1.7% on last quarters results but a drop of 13.2% on the same quarter last year.

IVA figures show an increase of 4.3% on last quarter but a 22% reduction on the same period last year.

Mark Sands, insolvency partner at KPMG said: 'After many years of increases we have seen three consecutive falls when compared to the year before. One of the main reasons is the drop in the number of IVAs, following concerns about whether they are always the most appropriate course of action for the individual'.

According to KPMG’s analysis 16% of IVAs put forward in the last quarter were rejected and also revealed that the average debt owed by someone entering an IVA in the last quarter was £48,200 and that in the same period more than 500 people entered into an IVA with debts in excess of £100,000.

KPMG has predicted that as the effects of the credit crunch trickle down to the individual the number of personal insolvencies will hit record levels by the end of the year.

Further reading:

UK bankruptcy regulations could worsen the credit crunch

Insolvency Service statistics