'Record high' for personal insolvencies

10/08/2009

More than 18,000 people across England and Wales were declared bankrupt over the second quarter of the year, new figures show.

The data, from the government's Insolvency Service, revealed that this was a 15.3 per cent rise on cases recorded in the corresponding period in 2008.

In addition, the latest statistics suggested that there has been a 27.4 per cent increase in individual insolvencies in the three months to June 2009 compared to the same quarter last year.

Commenting, Pat Boyden, partner and personal insolvency expert at PricewaterhouseCoopers, said that people worried about their finances should seek professional advice.

"Overall and perhaps not unexpectedly, personal insolvencies have continued to rise at a significant rate and have reached the highest number on record," he noted.

"We advise individuals in financial difficulty, whether self-employed or consumer, to seek help and to engage with creditors at the earliest stage."

Kevin Still, director of EuroDebt, added: "Our latest analysis of the reasons why people come to us for debt management help shows a sustained trend of clients signing up to our debt solutions due to 'loss of income' or redundancy which is a clear reflection on the state of the current climate.

"Other reasons for signing up to a EuroDebt Debt Management Plan include 'debt spiral' at 21.29 per cent, followed by 'poor financial management' at 14.79 per cent - an increase over the last period of 1.3 per cent.

"The fact that 'debt spiral' is still in the top three reasons also, I believe, demonstrates the impact of enormously restricted lending practices over the last year or so.

"Revolving credit was certainly the fallback for many families and individuals over the last few years. But with so many lenders pulling back on new credit applications this hasn't been an option more recently."

Tags; Income Worries and Debt,

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