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Bankruptcies still on the increase
Published on: 04 August 2006
The latest insolvency figures published by the DTI show a continuing increase in the number of people being made bankrupt or entering into individual voluntary arrangements (IVAs) with their creditors
The quarterly statistics published today, show the number of bankruptcies in the last quarter rising to 14,915 compared to 11,259 for the same period last year, a 32.5% increase. Also rising dramatically are the numbers of people opting to enter into voluntary arrangements with 11,105 reported in the last quarter compared to 4,386 for the same period in 2005, a massive 153.2% increase.
These personal insolvency figures follow several years of reports of climbing consumer debt, reaching over a trillion pounds last year, with retailers enjoying a number of bumper sales years on the back of it.
The increase in personal insolvencies has led to heavy advertising in the press and even on TV by a number of organisations offering various solutions including consolidation loans, debt management plans, and IVAs.
Carl Faulds, Managing Director of Portland, the south's largest independent insolvency and recovery firm, said, "The key is for people in financial difficulty to get proper professional advice. There are a lot of businesses offering financial solutions to over-indebted individuals. Some of these organisations claim to be authorised by the Office of Fair Trading, or under the Consumer Credit Act, neither of which involves much more than completing an application form and paying a registration fee. Proper advice is available from trained and regulated Licensed Insolvency Practitioners, such as ourselves who will usually offer a free initial consultation and be able to fully advise on all the options available and their implications. I have heard of a number of scandalous cases where people on means-tested benefits are being persuaded to make monthly payments over up to five years, basically to cover their advisors' fees, where really bankruptcy would be a far better option for them".
The number of companies failing in the last quarter totaled 3,265, a decrease of 3.3% on the same period last year, but there has been an increase in administrations where the prime objective is to turn the company around.
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