UK Bankruptcy Levels Are Highest In Costal Towns
An IVA could be a good bankruptcy alternative
Coastal towns in the UK have the highest levels of personal bankruptcies, according to the findings of research by accountancy group Wilkins Kennedy.
The study, which looked at the 50 largest towns and cities in the UK, found that the average rate of personal insolvency in coastal towns is 20.6 per 10,000 adults, compared to the national average of 15.7 per 10,000 adults.
Per 10,000 adults, Hull was found to have the highest rate of personal insolvencies – with 26.6 – while Plymouth had 26 and Poole had 22.4.
Keith Stevens, a partner at Wilkins Kennedy attributes the findings to the decline of some of the key industries for the UK’s coastal towns.
ìThe shipbuilding and fishing industries have been declining for decades while the shift from domestic to foreign tourism has caused a huge shock to UK seaside resorts, resulting in stubbornly high unemployment rates in coastal towns,” he said. “It is surprising to see that the impact of the decline of the UKís coastal economies is still being felt now.
ìOne of the first things that happens when a local economy persistently under performs a regional or national economy is that the more entrepreneurial or highly educated people start to think about relocating to prosperous areas.
“The ones who stay are those at the lower end of the income ladder, and, obviously, the lower the income, the higher the risk of getting into financial trouble.”
The high concentration of pensioners in coastal towns could also explain the higher level of personal insolvency, experts claim.
Separate research by Wilkins Kennedy found the number of retired bankrupts has jumped 164 per cent in the past five years as more people go into retirement with growing levels of unpaid debts amid the recession.
Figures released by debt charity Credit Action earlier this month reveal that one person is declared bankrupt or insolvent almost every four minutes in the UK. The same report also stated that 125 properties were repossessed every day in the day in the quarter up until the end of June, with mortgage lenders predicting the number could rise to 178 in 2010.
One increasingly popular option for people looking to avoid the consequences of becoming bankrupt is an Individual Voluntary Arrangement (IVA) – a formal agreement between the debtor and their creditors. Although launched in 1986, it is in the last few years of economic turmoil that the IVA has risen to prominence and the number of applicants are expected to rise as people continue to struggle with their debts.
Click here to see if an IVA is right for you.