Insolvency figures reach new peak

Insolvency figures have continued their recent run of record highs with government figures showing that they reached a new peak of 26,021 in the second quarter.

The figure is well up on the 15,645 who filed for protection from creditors in the same period of last year and the 23,653 who did so during the first three months of 2006.

The Insolvency Service said that 11,105 were individual voluntary agreements (IVAs) while 14,915 were fully-fledged bankruptcies.

Applications for IVAs, which agree a plan to return a percentage of borrowing to lenders while writing off the rest, were 153 per cent up on the same period of 2005.

Accountancy firm KPMG has estimated that the total number of people going bankrupt this year will for the first time be greater than 100,000.

“Pressure could mount further as consumers face higher energy bills and rising interest rates and we predict a record number of personal insolvencies of 100,000 in 2006, and we think the figures result in meaning someone is entering formal insolvency every minute of the working day,” said head of insolvency at KPMG Mark Sands.

The figures were released only hours after interest rates were raised, leading many to warn that changes in the best rates of borrowing will impact on debt affordability.

© Adfero Ltd

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