New statistics show record personal insolvencies
Article by Paymex 4th Feb 2010 00:00
A record 35,574 people in England and Wales were declared insolvent in the last quarter of 2009, according to statistics published by the Insolvency Service on Friday.
The figure, a 24.9% rise on the same period a year ago, was made up of 17,007 bankruptcies, 13,219 Individual Voluntary Arrangements (IVAs) and 5,348 Debt Relief Orders (DROs).
In contrast to the jump in personal insolvencies, the number of businesses going bust dropped by 1.7 per cent to 4,566 on the previous quarter and fell by 1.1 per cent on the same period the year before.
The difference between personal and corporate insolvencies is said to be driven by a growing number of small business owners using personal credit cards to buy supplies and other business essentials as an alternative lending measure during the downturn.
Experts predict that personal insolvency levels are only going to get worse over the next two years as creditors become more aggressive in claiming debts in the recovery, and the figures suggest that there are even more people who are yet to face up to their financial problems.
Baines and Ernst Ltd