BUSINESS insolvencies in Northern Ireland fell by more than quarter in the last quarter, indicating what some are seeing as a strengthening of economic conditions in the region.
But the number of individuals becoming financially insolvent continues to rose, with 640 separate orders made in the north over the October-December period, which is 3.7 per cent higher than the same quarter in 2016, according to government figures.
The figures for individuals are made up of three types of personal insolvency - bankruptcies; individual voluntary arrangements (IVAS), where money is shared out between creditors; and debt relief orders (DROs), which are aimed at people with lower amounts of debt but no realistic prospect of paying it off.
The fourth quarter insolvency breakdown for Northern Ireland is: 245 bankruptcies (down 5.4 per cent on 2016), 276 IVAs (up 6.2 per cent) and 119 DROs (up 21.4 per cent).
The huge jump in the DROs can possibly be explained by a change to the eligibility criteria introduced at the end of 2016 which made such orders available to people with up to £20,000 debt (up from £15,000) and £1,000 assets (up from £300).
Low interest rates have been keeping people's borrowing costs relatively low, but concerns have been raised in recent months about high annual increases in consumer credit and that some households could be at risk of over-stretching their finances.
Meanwhile there were 89 company insolvencies in Northern Ireland in the fourth quarter, an encouraging 29.4 decline that in the same period a year earlier.
Of these, 63 were compulsory liquidations (down from 84 in 2016), 17 were creditors’ voluntary liquidations (down from 24), four administrations and five company voluntary arrangements.
Kieran McGarrigle, finance partner at Arthur Cox, said: “The fact that there were nearly 30 per cent less company insolvencies in the final quarter points to a strengthening of economic conditions and is to be warmly welcomed.
“Looking ahead, we hope this is the beginning of a trend that will continue throughout 2018 and beyond, especially given the uncertainty that the recent demise of Carillion has caused for many businesses throughout Northern Ireland.”
