100,000 indviduals to go bust in 2006

100,000 indviduals to go bust in 2006

Individuals entering into insolvency will hit six figures this year, says KPMG

As many as 100,000 people could enter insolvency in 2006, the highest ever
recorded figure in the UK, predicts KPMG.

Based on today’s DTI quarterly insolvency statistics, which revealed 23,939
people went into insolvency for Q1 2006, KPMG believes the total for the year
will hit six figures.

‘Earlier this year, we saw a dramatic increase in the number of people
calling help lines and asking the Citizens Advice Bureau and other organisations
for guidance,’ said Steve Treharne, head of personal insolvency at KPMG.

‘The levels and availability of credit have been rising for a while. Although
the most recent figures on bank lending show that this trend has reversed for
the first time, there would have to be a prolonged period of reduction in the
levels of credit before we see an end to these soaring levels of personal
insolvencies.’

The use of the individual voluntary arrangement as an alternative for debtors
to manage their debt while avoiding bankruptcy has grown, according to the
latest figures.

There were 7,961 IVAs during the quarter, a 13.7% rise on the previous
quarter and 142% increase on a year earlier.

Bankruptcies increased by 51% on the previous year, growing to 15,389.

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