Personal insolvencies hit record high

PERSONAL INSOLVENCY FIGURES for 2010 have hit a new record according to statistics released today from the Insolvency Service.

Overall in 2010 there were 135,089 personal insolvencies, the highest since records began in 1960.

Louise Brittain, partner in Deloitte's insolvency team, said: "We saw a record number of personal insolvencies in 2010 despite a decline in the final quarter of the year.

"These numbers do not include the thousands of individuals, attempting to manage their debt alone without seeking professional help. We will undoubtedly see the number of people filing for bankruptcy in 2011 remain high as soaring commodity prices, inflation and the increase in VAT begin to hit."

Trade body R3 recently undertook research which showed business redundancies will increase at the end of 2011.

There were 30,729 individual insolvencies for the fourth quarter of 2010, a decrease of 13.6% on the same period a year ago.

This was made up of 12,049 bankruptcies, a decline of 29.2% on the same period in 2009 and a drop from the previous quarter of 13,907. There were 12,508 individual voluntary arrangements, which dropped 5.4% compared to the same period last year and 452 less than the previous quarter.

Debt relief orders (DROs) also declined in the last quarter of the year to 6,172 compared to the previous quarter with 7,068. However, DROs increased 15.4% in 2010 compared with 2009, although the insolvency procedure was only introduced in Q2 2009.