BusinessBusiness RecoveryBankruptcy calls on debtors rocket by nearly 20%

Bankruptcy calls on debtors rocket by nearly 20%

Number of creditors appealing to the courts to have individuals declared bankrupt shot up by 18% between April and end of June

The number of creditors appealing to the courts to try and get their money
back from people they believe are on the verge of bankruptcy shot up by 18% last
quarter.

Creditors launched 5,625 bids to have individuals declared bankrupt between
April and the end of June, the
Ministry of Justice
said last month.

The organisation publishes quarterly statistics on insolvency proceedings
issued in the county courts and High Court for both bankruptcy petitions taken
out against individuals and company winding up petitions in England and Wales.

The figures are a key indicator for the number of people and businesses that
may go bust in the future and the latest hike shows that the tough economic
conditions show no sign of improvement for creditors, individuals and businesses
alike.

Further breakdowns showed that creditors had issued 2,927 company winding up
petitions in the courts, an increase of 11% on the petitions in the same quarter
of 2007.

13,533 people threw in the towel and lodged debtors’ bankruptcy petitions in
the courts, which is about the same as in 2007, but there has been a marked
shift in recent years towards cash-strapped individuals going for bankruptcy.
There are also still a relatively low number of individual voluntary
arrangements being established.

There were officially 24,553 individual insolvencies pushed through in
England and Wales in the second quarter of 2008 according to the Insolvency
Service.

This was made up of 15,297 bankruptcies, and 9,256 IVAs.

‘For bankruptcy orders there has been a pronounced shift towards debtor’s
petition bankruptcies and away from creditor’s petitions in recent years. By the
second quarter of 2008, 84% were made on the petition of the debtor,’ the
Insolvency Service said.

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