The prediction came as quarterly insolvency statistics published today by the DTI showed bankruptcy has continued to skrocket.
During the past three months 9,156 people filed for bankruptcy, representing a massive increase of almost 30% on the previous year.
Gareth Hughes, president of R3, the association of business recovery professionals, predicted things could get even worse as consumers entered the Christmas period.
‘We are concerned that those already struggling with debt will bury their heads in the sand until after the festivities,’ he said.
‘Practitioners up and down the country are seeing very excessive levels of consumer credit card debt. It’s a real concern that this is happening now when, for the first time in many years, we are seeing falls in property values. This combination points to further record bankruptcies ahead,’ he said.
Meanwhile, at the other end of the spectrum, company insolvencies hit a record low. There were just 2,975 corporate failures in the past three months, a fall of 12% on the previous year.
There were 421 administrations compared to just 203 receiverships, prompting suggestions that the Enterprise Act, which came in to force in September 2003, was succeeding in its goal of creating a rescue culture.
Malcolm Shierson, an insolvency partner with Grant Thornton, said: ‘We have now reached a rate of 2:1 in favour of administrations, signalling how UK corporate debenture holders have embraced this legislation.’
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