Number Of Insolvencies Continues To Increase
Although we are seeing signs of improvement in the UK economy as a whole and there is generally more optimism both from industry experts and consumers with regard to the future, for many individuals and companies, any recovery is coming too late and the damage to their financial situation has already been done, with more and more people and firms falling behind with their personal loan and business loan repayments, leaving them in a growing arrears and loan default position.
It is little surprise therefore, that there has been a significant increase in the number of insolvencies being declared over the course of the last twelve months, due to growing loan and credit card debt.
The latest figures from the insolvency service have revealed that the number of individuals becoming insolvent reached 35,242 by the end of September this year, an increase of 28.2 per cent on the same time last year, as individuals find themselves unable to maintain their personal loan and credit card payments and end up in a downward spiral of debt. This total figure was made up of 12,390 Individual Voluntary Arrangements (IVA’s), 18,347 bankruptcies and 4,505 Debt Relief Orders (DRO’s).
It was a similar position with company insolvencies, although companies seem, on the whole, to be able to manage their business loans and other debts better than individuals, as the figures are not quite as bad. There were a total of 4,716 company insolvencies over the same period, showing an increase of 14.6 per cent above twelve months ago, although the number has dropped by 4. 7 per cent in the last three months, compared with the previous quarter, which could signify some positive news for businesses and indicate the possibility of the first signs of recovery for many companies.
