Personal Insolvencies Hit All Time High

Tue, 09 Feb 2010

Personal insolvencies in England and Wales soared to a record high of more than 130,000 in 2009, according to latest figures from the Insolvency Service .

The group’s data showed that there were 134,142 individual insolvencies last year, up 26 per cent from the 106,544 insolvencies recorded in 2008 and the highest level since records began in 1960.

Some 35,574 individual insolvencies were made in the fourth quarter of 2009 alone, up 24.9 per cent from the same period the previous year.

According to the Insolvency Service data, this figure was made up of 17,007 bankruptcies, 13,219 Individual Voluntary Arrangements (IVAs) and 5,348 Debt Relief Orders (DROs), which were introduced last April.

The total number of bankruptcies for the year hit 74,670 - up 10.7 per cent on 2008 – while 47,641 people entered into an IVA (a rise of 21.8 per cent) and 11,831 had a DRO approved.

Business liquidations also increased to 19,077 last year, although the data showed the rate at which companies went under slowed during the final quarter.

Mark Sands, director of personal insolvency at RSM Tenon, said he expects insolvency numbers to reach 150,000 this year.

He commented: "Despite the recent news that the recession has come to an end, the impact of unemployment and falling incomes mean that we will see levels of personal insolvencies continue to increase into 2010 as the effects of the recession continue to linger."

"We should therefore expect to see a further rise of around 12 per cent in annual insolvency figures this year to 150,000 and these levels are likely to remain until at least 2012."
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