The number of individuals entering into formal insolvency proceedings reduced slightly compared with the third quarter of 2009, a fall of 3.7% according to figures released by the Insolvency Service.

The number of individuals entering into formal insolvency proceedings reduced slightly compared with the third quarter of 2009, a fall of 3.7% according to figures recently released by the Insolvency Service.

However, there has been a vast swing in the type of insolvencies. The number of people entering into Individual Voluntary Arrangements increased by 4.6%. The number of Bankruptcy Orders being made reduced by 24.2% however - the number of Debt Relief Orders being made increased by 56.9%.

Debt Relief Orders are a type of mini bankruptcy and are only available to individuals with assets of less than £1,300 (car of less than £1,000 and £300 of other assets), disposable income of less than £50 per month and unsecured liabilities of less than £15,000.

So do these statistics support the new procedure - or are individuals obtaining Debt Relief Orders when they do not qualify? The majority of individuals I speak to do not qualify for this procedure, mainly because of the extent of their unsecured liabilities.

What are your views?