BusinessBusiness RecoveryFears surface over personal insolvency surge

Fears surface over personal insolvency surge

The government insolvency service will not have enough bankruptcy specialists to cope with the surge in personal insolvency cases likely to take place when the Enterprise Act comes into force, experts have warned.

Link: Enterprise Bill will aid consumers

Last week, insolvency experts told Accountancy Age the number of people becoming bankrupt would continue to snowball as credit card debt rises and the new ‘soft touch’ personal insolvency legislation made it easier to get out of bankruptcy unscathed.

But experts say that, because most of the new bankruptcies are not assets-based, the official receiver will have to deal with them instead of farming them out to insolvency firms, which it does with assets-based bankruptcies.

R3 president David Buchler said: ‘If this upswing in consumer debt is accompanied by an economic downturn, the Insolvency Service could be swamped with bankrupts.’

Top bankruptcy expert Louise Brittain, a partner at Baker Tilly, said that with scarcely 50 bankruptcy experts in the country, the insolvency profession will have a difficult time coping with the large amount of personal financial failures on the horizon.

She said: ‘Bankruptcy is not seen as sexy. It is the poor relation of the insolvency profession.

‘If you are a chartered accountant it was always seen that the big money was in corporate work. Although this has changed, the majority of people still believe that.’

The Department of Trade denied the claims, saying that with the new legislation coming into force in 2004, ‘a period of time for adjustment’ for the insolvency profession was needed.

Related Articles

Investment firm acquires Avon Steel Company Limited

Business Recovery Investment firm acquires Avon Steel Company Limited

1w Emma Smith, Managing Editor
Manchester law firm enters into administration

Business Recovery Manchester law firm enters into administration

1w Emma Smith, Managing Editor
KPMG appoints new global head of insolvency

Business Recovery KPMG appoints new global head of insolvency

4w Emma Smith, Managing Editor
EY hired by Carillion to review finances

Accounting Firms EY hired by Carillion to review finances

5m Alia Shoaib, Reporter
Using insolvency as a debt recovery tool

Business Recovery Using insolvency as a debt recovery tool

6m Emma Smith, Managing Editor
UK government should support mid-sized businesses to create a ‘new economy’ post-Brexit, says BDO report

Business Recovery UK government should support mid-sized businesses to create a ‘new economy’ post-Brexit, says BDO report

8m Alia Shoaib, Reporter
Over 800 jobs saved as Endless LLP acquires Jones Bootmaker

Business Recovery Over 800 jobs saved as Endless LLP acquires Jones Bootmaker

9m Emma Smith, Managing Editor
FRP Advisory expands operation with new office, partner appointments

Accounting Firms FRP Advisory expands operation with new office, partner appointments

10m Emma Smith, Managing Editor