BusinessBusiness RecoveryPersonal 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.’

Related Articles

Investment firm acquires Avon Steel Company Limited

Business Recovery Investment firm acquires Avon Steel Company Limited

7d Emma Smith, Managing Editor
Manchester law firm enters into administration

Business Recovery Manchester law firm enters into administration

7d 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