Personal insolvencies have increased dramatically according to figures
released in the latest quarterly results by the Insolvency Service.
The Q4 2008 results show that individual insolvencies has increased by 18.5%
compared to the same quarter last year and 8.2% on the previous quarter.
The figures are broken down into a 22.2% increase of bankruptcies on Q4 2007
and a 9.4% rise on Q3 2008. Individual Voluntary arrangements have risen by
12.2% on the previous year and 5.9% on the preceding quarter.
Mike Gerrard, personal insolvency partner at Grant Thornton, said:
‘Unemployment is liable to rise well over 2 million in the coming months and
could hit 3 million by the end of the year. Unemployment is normally a lagging
indicator so to see so many job losses this early in the employment cycle is a
The results show a trend towards bankruptcy rather than IVA as housing and
remortgaging become more difficult. Insolvency practitioners believe consumers
are left wondering whether they can commit to a five year plan or if the bank
will approve them.
Mark Sands, director of personal insolvency at KPMG, said: ‘With property
prices falling many consumers have little or no equity in their homes and may be
unwilling to commit to a five year repayment plan to reschedule their credit
card and loan repayments at a time of such great uncertainty.’
‘More people have gone down the bankruptcy rather than the IVA route, which
is a reflection of the fact that lenders have tightened up the criteria for the
acceptance of IVAs’ added Alan Tomlinson a partner at Tomlinsons.
The second largest improvement in ‘significant’ levels of financial distress since the EU Referendum was in professional services, found research from Begbies Traynor
Steve Absolom and Will Wright from KPMG Restructuring have been appointed joint administrators to City Motor Holdings and associated companies
Partners from Johnston Carmichael have been appointed as joint administrators to Axon Well Interventions Products UK
Begbies Traynor have been appointed administrators of William Anelay Ltd, York, one of Britain’s longest-established construction and heritage restoration companies