Insolvencies rise to record high

06/11/2009

New figures released by the Insolvency Service have shown a record number of people were declared insolvent in the third quarter of the year.

More than 35,200 people in England and Wales were declared insolvent between July and September, with 18,347 bankruptcies alone.

Nearly 12,500 people entered into Individual Voluntary Arrangements'>Individual Voluntary Arrangements with their creditors, while over 4,500 took out the government's new debt relief orders.

It represents an increase of 28 per cent on a year ago and a 6.6 per cent increase on the previous quarter as the recession continues to cause financial misery for those struggling with debt problems'>debt problems.

According to debt solutions firm EuroDebt Director Kevin Still, "These figures are not a surprise, as unemployment continues to rise and consumer's disposable income continues to be squeezed.

We would expect the number of IVAs, Bankruptcies and Debt Management Plan'>Debt Management Plans to continue to rise into 2010.

If interest rates are raised then this will have a knock on effect as well.

EuroDebt is seeing more people that were historically credit worthy looking at debt management solutions because they can no longer re-finance to clear unsecured debts on credit cards and personal loans."

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