Record insolvencies up 27.4%
Record insolvencies up 27.4%
Friday 7th August 2009
There has been a record 33,073 insolvencies declared over the second quarter of this year.The Insolvency Service said today the number in England and Wales was up 27.4 per cent on the same period last year.
Rising unemployment and a 'clampdown on credit' was blamed for the difficulties facing borrowers, with the number of company insolvencies also up, rising 39.1 per cent year on year.
Of those individuals made insolvent over the three months, 18,870 people were declared bankrupt and 12,225 entered into an individual voluntary arrangement (IVA) with their creditors, while the remaining 1,978 signed up to the government's new debt relief orders.
Liberal Democrat business spokesperson, Lorely Burt said: "These figures make grim reading. Too many businesses are going bust because the government is failing to provide the necessary support.
"Alistair Darling has still not managed to get banks lending at reasonable rates.
"The government must act now to make sure solvent businesses and individuals get access to the credit they need to survive the recession."
The rise could reflect falling house prices and tightened lending criteria making it harder for borrowers to release equity from their home to assist other debts.
An Association of British Insurers (ABI) spokesman added: "The latest insolvency figures are alarming. They are particularly bad news for suppliers who are unsecured creditors, as it's likely they will herald an increasing number of 'pre-pack' administrations, in a year which has already seen a record number."
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