Insolvency peak may be some way off
by Gill Montia
Story link: Insolvency peak may be some way off
The Government’s Insolvency Service has produced quarterly statistics showing a decline in the number of people declared insolvent, during the three months to the end of June.
In total 26,956 residents of England and Wales were declared bankrupt, or took out an Individual Voluntary Arrangement (IVA), during the quarter; 8% less than during the previous three months of the year.
When compared with figures for the first quarter of 2007, IVAs decreased by 15%, to 10,698 and the number of people declared bankrupt fell 3%, to 26,956.
The data has come as a surprise to bankruptcy experts, particularly as the Insolvency Service has revised its statistics for the first quarter of this year so that both quarters are now showing a decrease in insolvencies.
Some analysts are predicting that the trend will not continue and that a peak in personal insolvencies is still someway off.
This view is backed by the fact that the impact of recent interest rate rises has not yet fully been felt and at least one further base rate rise is expected this year.
Thomas Charles, the debt consultancy, has recently published research showing that 8.2 million British adults are in serious debt while 2.1 million are finding it difficult to meet their repayments.
In its survey, the consultancy took serious debt to mean £10,000 in unsecured loans and the number of UK consumers in this category increased 29% in the three months to the end of June 2007, compared with the same period of 2006.
Men were slightly ahead of women in indebtedness, with 18% reporting debts of £10,000 and over. For women the figure stands at 15%.
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