PwC warns of troubled period for borrowers
Big Four firm forecasts a rise in insolvencies as credit card debt surges, despite recent figures showing a drop in bankruptcy figures
PricewaterhouseCoopers has warned that the drop in personal insolvencies may
precede a troubled period for borrowers.
Recent statistics have shown that the number of people going bankrupt has
dropped below the peak level of about 30,000 for the same period in 2006, the
first reduction year-on-year for five years.
However, Pat Boyden, partner in the Business Recovery Services practice at
PwC, said: ‘While personal insolvencies are below their peak level of just under
30,000 in the last quarter of 2006, the recent rise in credit card debt suggests
that further increases could be round the corner. Rises in credit card debt and
repossessions are both worrying signs that consumers are feeling the pinch and
turning to unsecured borrowing as means to make ends meet.’
PwC warned that the continuing problems in the sub-prime market may mean
consumers find it harder to borrow their way out of trouble, leading to another
wave of insolvencies in the coming months.
Further reading:
Law firm
creates credit crunch insolvency team