Personal insolvencies at all-time high

Personal insolvencies at all-time high

Personal insolvency hit an all-time high last week, just as UK consumer debt passed the symbolic £1 trillion mark and interest rates rose yet again to 4.75%.

Link: PwC in plea for bankruptcy alternative

Some 11,535 people went bust in England and Wales during the second quarter of the year, up almost a third on the same period in 2003. But experts were divided over whether controversial changes to bankruptcy law, introduced in April, were to blame for the new high water mark.

Many in the profession had predicted that bankruptcy rates would soar after the discharge period was cut from three years to less than 12 months.

‘It looks like the new Enterprise Act provisions’ contributed to this rise, suggesting that bankruptcy is now seen as a more acceptable way of dealing with debt difficulties,’ said Steve Treharne, head of personal insolvency at KPMG.

But the Insolvency Service rejected the claim. ‘The bankruptcy system is not softer; the legislation did not affect the number of people going into bankruptcy,’ a spokeswoman said.

Gareth Hughes, president of R3, the Association of Business Recovery Professionals, agreed. ‘The quarterly bankruptcy increase would appear to be in line with the upward trend generally. The message that bankruptcy is no soft option is perhaps getting through.’ Patrick Boyden, insolvency partner with PricewaterhouseCoopers, added: ‘With rising interest rates, the pressures on those who have borrowed to the hilt are unlikely to disappear soon.’

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource