Deloitte Warns Over Personal Insolvency Levels

Tue, 11 May 2010

The number of personal insolvencies in the UK will remain at record high levels in the second, third and fourth quarters of 2010, according to accountancy firm Deloitte .

Recent figures showed that the total number of people resorting to formal insolvency in the first three months of the year totalled 35,682 – the highest figure since records began and up around 18 per cent on the same period last year.

Louise Brittain, partner in Deloitte’s Contentious Insolvency Division, warned that insolvency figures will continue to increase over the coming months as consumers are still feeling the effects of the recession.

"Whilst the corporate sector may be turning a corner, the same cannot be said for individuals," she said.

"Ongoing financial pressures will be compounded not only by the fallout from the festive season, but also by concerns around disposable income and the impact of any measures taken by the next government to reduce national debt ."

Brittain added: "The potential uncertainty created by a hung parliament during challenging economic times, means that individuals will continue to struggle to find a way out of debt, resorting to formal insolvency to relieve the pressure."

"We will see an increasing number of high net worth individuals filing for bankruptcy, particularly as personal guarantees on corporate debt are called in."

" Personal insolvency figures have yet to peak, and unfortunately I can only see them continuing to rise."
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