Monthly Personal Insolvency Figures Exceed 14,000 For First Time On Record

May 10, 2010 - PRLog -- Key Statistics:

* Record 14,000 insolvencies in March, 16% higher than the previous monthly record in November 2009
* More than 35,000 personal insolvencies in Q1, 2010, repeating the record levels of the last two quarters
* A 15% increase in personal insolvencies in Q1, 2010 compared to the same period last year
* More than 388 people per day entered into insolvency in Q1, 2010
* East Anglia is the UK’s insolvency hotspot, rising by 30% on the same period in 2009

Mark Sands, Head of Bankruptcy at RSM Tenon, comments on record personal insolvency levels:

A record 14,000 personal insolvencies in March, 16% higher than those in November 2009, the previous record level

“The ‘debt-lag’, where monies owed have piled up over a series of months before insolvency hits, can last from anything between 9-24 months. The record insolvencies for March will partly be a hangover from Christmas, but it is more likely to be due to the ongoing effects of the financial crisis.”

More than 35,000 personal insolvencies in Q1, 2010, 15% higher than Q1, 2009

“Although the glass has started to look half full for the economy, it’s very much been drained of every drop when it comes to individuals’ personal finances. Months of job losses and decreased earnings has taken its toll on the public’s purse strings. We are likely to continue to see record numbers of people look to insolvency into 2011.

“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. Advice should be readily available on how to budget, what to do if repayments can’t be made and the insolvency options available if all else fails. We are seeing record levels for the third quarter in a row so advice is crucial to help the many hundreds of thousands people currently suffering financial distress who are on the verge of personal insolvency.”

Individual Voluntary Agreements (IVAs) fell by 16% compared to the previous quarter

“This fall is not indicative of an overall drop in insolvencies. It is the reverse. The economic climate has made it harder for people to make the regular monthly repayments on which the agreement is based. Job losses have forced people to look at different insolvency options.”

Bankruptcies and Debt Relief Orders (DROs) rose by 8% and 6% respectively

“Around half of all personal insolvencies are bankruptcies so this apparently modest 8% increase actually translates to more than 1,300 extra people going bankrupt in the last quarter.

“We expect the popularity of DROs to rise once the debate around the inclusion of pensions is resolved to ensure they are excluded from a person’s total net worth*. To date, this solution has proved more popular and better suited to women who account for 63% of all DROs.”


* DROs were launched in April 2009 to help anyone with total assets of less than £300, surplus monthly income of less than £50 and total liabilities under £15,000. Any pension provision at present included in an individual’s total assets resulting in many people being ineligible for a DRO.

http://www.griffinandking.co.uk

# # #

Griffin and King are a leading firm of Insolvency Practitioners within the West Midlands with offices covering Dorset, Hampshire, Shropshire and Mid Wales. We are licensed by The Institute of Chartered Accountants in England & Wales. At Griffin & King we understand. With over 25 years experience we have helped businesses and individuals find solutions to their financial problems. We believe there really is "Life after Debt!"