Bankruptcy figures hit 11-year high

Link: Individual insolvencies soar

There were 8,524 bankruptcies in the first quarter of this year, an increase of 23% on the same quarter in 2003.

But because the figures relate only to the first three months of the year, those looking to see what effect the new ‘softer’ bankruptcy regime has had will have to wait.

One expert said the number of Britons going bust was likely to increase further when the DTI publishes its next set of quarterly figures.

Charles Turner, director of business recovery services at PricewaterhouseCoopers, said: ‘The introduction of the new bankruptcy regime, perceived by many as a softer option, is likely to result in a continued growth in personal insolvencies, particularly coupled with recent hikes in interest rates.’

Since April, bankruptcy has been shortened from three years to no more than 12 months. The Insolvency Service has been at pains to point out other new measures, which it believes prevent ‘dishonest’ or ‘reckless’ bankrupts from abusing the system to clear debts.

Today’s figures suggested any increases when the DTI publishes its next quarterly figures will need to be read in light of the exiting upward trend, fuelled by record consumer debt.

Related reading