BusinessBusiness RecoveryFigures highlight surge in bankruptcy and collapse

Figures highlight surge in bankruptcy and collapse

Bankruptcy filings in this quarter are higher than in any three month period in the last 10 years, according to figures by the Insolvency Service

Louise Brittain, insolvency partner Baker Tilly

Louise Brittain, insolvency partner Baker Tilly

More people have petitioned for bankruptcies in this quarter than in any
three month period in the last 10 years, while company collapses have risen
more than 25% year-on-year,
Insolvency Service
figures have shown.

Bankruptcy filings increased by 12.1% on the previous quarter, a total of
17,341, and a hike of 9.5% on the same period in 2007.

Pat Boyden, insolvency partner at
PricewaterhouseCoopers said:
‘This is a substantial jump. We did think that personal insolvencies would
increase, but not this much.’

‘Obviously this is due to the economic climate and budgets being squeezed but
also the rising rate of unemployment,’ he added.

Creditors are clawing their money back too, according to the statistics,
which showed an increase in creditor petitions for bankruptcy of 10% on the last
quarter.

Louise Brittain, insolvency partner Baker Tilly, said: ‘Since the last
quarter, creditors are becoming more aggressive.’

Brittain predicts this is just the tip of the iceberg, with insolvencies set
to rise until at least next year.
A 26.4% rise in company failures shows UK businesses are starting to feel the
full effects of the economic slump as the financial upheaval feeds through to
them.

There were more than 4,000 compulsory liquidations and creditors’ voluntary
liquidations in total in England and Wales in the third quarter of 2008. In the
last few months, companies across a diverse range of sectors have had no option
but to call in the administrators.

Estate agent Humberts, textile retailer Roseby’s and celebrity chef Tom
Aitken’s eateries have all gone into administration recently.

Catherine Matthews, partner at licensed insolvency practitioners Tomlinson’s
said: ‘They underline just how tough things are for the moment for companies,
and that the recession is really starting to bite.

‘A 26% rise on the same period last year, and a steady increase
quarter-on-quarter, simply can’t be ignored. These are desperate times for many
businesses.’

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