March Insolvency Figures Reach Record Level

Fri, 30 Apr 2010

The number of Britons declared insolvent in March hit a record figure of 14,000, according to new data from accountancy firm RSM Tenon.

The insolvency figure is some 16 per cent higher than the previous monthly record in November last year and means the total number of personal insolvencies in the UK reached 35,000 during the first quarter of 2010 – equal to nearly 400 people per day.

The individual insolvencies for the first three months of the year consisted of some 18,330 bankruptcies – an increase of 10 per cent on the same period a year ago - and 11,046 Individual Voluntary Arrangements (IVAs), up 9 per cent on the same period in 2009.

Debt Relief Orders (DROs), which were introduced last April as an alternative option to bankruptcy for people with debts of less than £15,000, accounted for 5,662 of the first quarter insolvencies, 5 per cent more than the previous year.

Experts said the latest figures are worst than those recorded in previous recessions as households have never been in so much debt .

Mark Sands, head of bankruptcy at RSM Tenon, said: "Months of job losses and decreased earnings have taken their toll on the public’s purse strings. We are likely to continue to see record numbers of people look to insolvency into 2011."

He added: "The UK’s debt culture built up over the last decade has intensified the effects of the financial crisis. People need to understand the consequences of taking on debt and be given incentives to rebuild their savings ."
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