Insolvency Service Making Meaningful Improvements as UK Insolvencies Hit 15-Year High

What the Insolvency Service is improving

The Insolvency Service, an executive agency of the Department for Business and Trade, announced on 26 June 2026 that it is implementing a package of operational improvements across the UK personal and corporate insolvency system. The announcement follows an internal review and engagement with insolvency practitioners, creditor bodies and debt advice organisations about the effectiveness of current processes.

The improvements focus on three areas: IVA oversight and standards, bankruptcy application processing speed, and communication quality for both creditors and debtors. The Insolvency Service said the changes reflect lessons from record insolvency volumes in 2024, when 99,799 individual insolvencies were recorded -- the highest figure since 2010 -- and court and Insolvency Service capacity was under significant strain.

UK individual insolvency in 2024

The 99,799 individual insolvencies registered in 2024 comprised 62,131 Individual Voluntary Arrangements (IVAs), 29,894 Debt Relief Orders (DROs), and 7,774 bankruptcies. IVAs remain the most common formal debt solution, allowing individuals to repay a portion of their debts over five years through a licensed Insolvency Practitioner while avoiding bankruptcy. DROs are available to people with debts under £30,000, minimal assets and low surplus income, and provide debt relief after a twelve-month moratorium period.

The Insolvency Service has faced criticism from creditor groups and some debt advisers about the quality and consistency of IVA oversight, with concerns about some IVA providers proposing arrangements that fail after one or two years due to unrealistic income and expenditure projections. The June 2026 improvements include enhanced guidance for insolvency practitioners on income assessment methodology.

What changes for debtors

For individuals considering or already in formal insolvency procedures, the Insolvency Service says improved communication standards mean faster acknowledgement of applications, clearer status updates during processing, and more accessible information about rights and obligations. Bankruptcy applications are processed online via the Adjudicator's Office. The Insolvency Service is not changing the substantive eligibility criteria for any debt solution -- IVA, DRO or bankruptcy -- but aims to reduce processing delays that have been a source of complaints.

Getting help with debt in 2026

The Insolvency Service recommends individuals seek free debt advice before entering any formal insolvency procedure. Free debt advice is available from the Money and Pensions Service (MoneyHelper), StepChange Debt Charity, Citizens Advice and National Debtline. The choice between IVA, DRO and bankruptcy depends on the level of debt, assets, income, property ownership and personal circumstances. An IVA requires a licensed Insolvency Practitioner; a DRO is applied for through an approved intermediary; bankruptcy can be applied for directly through the Adjudicator's Office online.

Frequently asked questions

What is the difference between an IVA and bankruptcy?

An IVA is a formal agreement between you and your creditors to repay a portion of your debts over five years, arranged through a licensed Insolvency Practitioner. You do not become bankrupt. Bankruptcy is a court or Adjudicator's Office order that typically lasts one year and results in your assets being used to pay creditors. Both affect your credit file for six years from the date of the insolvency.

Who qualifies for a Debt Relief Order?

A DRO is available to individuals with total qualifying debts of £30,000 or less, assets of £2,000 or less (excluding a vehicle worth up to £4,000 and household items), and surplus income of £75 or less per month after reasonable living costs. You cannot apply if you have been subject to a DRO in the past six years. A DRO is applied for through an approved intermediary, not directly.

How long does an IVA last?

A standard IVA runs for five years (60 monthly payments). Some IVAs include a payment break provision if your income drops temporarily. If you own a home, you may be required to attempt to release equity in year four, which can extend the IVA by a further year if unsuccessful. The IVA is completed once you have made all required payments and the Insolvency Practitioner issues a completion certificate.

Does insolvency affect my employment?

Bankruptcy can affect certain types of employment, particularly in financial services, law, and public sector roles. Check your employment contract and any professional regulatory requirements before applying. IVAs and DROs have fewer employment implications but should be disclosed to employers in roles where you are required to disclose financial difficulties. The Insolvency Service publishes guidance on employment implications at gov.uk.

Where can I get free debt advice?

Free debt advice is available from MoneyHelper (moneyhelper.org.uk), StepChange Debt Charity (stepchange.org), Citizens Advice (citizensadvice.org.uk) and National Debtline (nationaldebtline.org). These services are free and confidential. Avoid fee-charging debt management companies until you have taken free advice, as fees can significantly reduce the benefit of any debt solution.