Big rises in insolvencies predicted by trade group

04/11/2008

Personal and business insolvency numbers are expected to rise sharply, according to a new study.

A poll of insolvency practitioners by trade group R3 found that the overall number of people unable to pay their debts would rise from 120,000 in 2007 to almost 150,000 next year.

Business insolvencies are also expected to jump 41 per cent over this period, to almost 20,000 firms.

Meanwhile, almost six in ten poll respondents said that they expected the number of home repossessions to increase by "a lot" before 2010.

Commenting on the figures, EuroDebt director Kevin Still said: "It is probably worth commenting that these figures only represent projected insolvencies and that there are millions of people in the UK today that are unable to meet the contractual payments on their credit commitments.

"More business failures will result in more redundancies and at a more general level, reduced trading will reduce the opportunities for overtime and will decrease the level of disposable income for many households."

Nick O'Reilly, president of R3, commented: "The predicted 41 per cent increase in business insolvencies from 2007 to 2009 is catastrophic… For the last three or four years a number of businesses that perhaps were not performing well have been kept alive artificially by the easy availability of credit, which has now dried up."

Tags; Housing Debt and Bills, Credit Card Lifestyle, Young Family Finances,

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