50,000 people to benefit from Debt Relief Orders, claims KMPG
In a new report, KPMG claim that Debt Relief Orders (DROs) could help up to 50,000 in their first year. Personal insolvency is likely to hit in excess of 150,000 during this year, made up of DROs, IVAs and bankruptcy.
Mark Sands Director of Personal Insolvency at KPMG welcomed these advantages, commenting “Many people in debt suffer stress and anxiety; resolving their debt problems without the need to go to Court and at a lower cost will be a great relief, and will make personal insolvency accessible to many people who were previously unable to access bankruptcy due to the cost and were put off by the complexity and stigma of the process. As a result, we expect to see many more DROs in their first year than we will in a typical year in the future.”
Although DROs cost the applicant £90, this is less than 1/5 of the cost of a regular bankruptcy.
KPMG consider DROs and bankruptcy to start becoming a more popular choice over IVAs, due to the increasing number of people losing their jobs. IVAs, which typically have a 5 year payback period, are not sustainable without a reguar income.