Insolvency rate to rise by ‘catastrophic’ amount

The insolvency rate for small businesses could rise by as much as 41%,
compared with 2007, in the space of a year according to a poll by insolvency
trade body R3.

R3 polled 2,073 of its members which have suggested that insolvencies are
likely to reach the peak levels last seen in the 1992 recession the

The survey highlights the gloomy state that insolvency practitioners are
forecasting but also noted the ‘worrying trends in practices of securitisation
of debt’. More than half of the respondents saw a growing number of lenders
securing debt against individual homes.

Nick O’Reilly, president of R3, said: ‘What we are seeing now is a large
number of repeat inquiries from people that might have come to you months ago.
That’s one indicator of why we are predicting an increase.’

‘The battle for credit has been lost and there is no way out of what is
coming. Businesses and individuals will now have to face up to today’s tougher
climate and seek professional advice as early as possible’ he added.

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