Record Numbers Declared Insolvent
Recent Insolvency Service figures show that the number of individual insolvencies in England and Wales has risen by 19 per cent compared with the first quarter of 2008. Bankruptcies rose to an all-time high of 19,062 – up 23 per cent from the first three months of 2008. Individual voluntary arrangements rose 12 per cent to more than 10,700.
In 2006, we saw personal insolvencies peak and then plateau, but now they are rising again. Consumer debt is still at record levels and people are being hit by the recession which is pushing up unemployment and repossessions.
Sarah Walford, Revival Manager, said the number of insolvencies is expected to increase partly because of the introduction of debt relief orders, a new form of bankruptcy for people with debts of less than £15,000.
“We are seeing a lot of self-employed people, entrepreneurs and buy-to-let landlords getting into difficulty, said Sarah Walford of Revival.
The rise in bad debts will have an affect on impairment provisions at banks as people default on credit cards, loans and mortgages.
Company failures also rose sharply in the first quarter of the year. Insolvency Service figures show that 4,941 companies went into compulsory liquidation or creditors’ voluntary liquidations.
This is a jump of 56 per cent from the same period in 2008 and a 7.1 per cent rise on the last quarter of 2008.
Sarah says “The sooner you seek financial advice, the more options there are available to you”.
