Saturday, August 08, 2009

U.K. Record 33 Thousand People Declared Insolvent in Q2

by Calculated Risk on 8/08/2009 11:38:00 AM

From the Independent: Banks take the blame as 33,000 are declared insolvent

More than 33,000 people were declared insolvent during the second quarter of the year, official statistics revealed yesterday, the highest number ever recorded. ...

Almost 19,000 people were declared bankrupt during the second quarter of the year ... while a further 12,000 people entered into individual voluntary arrangements, agreements with creditors that fall short of full-scale bankruptcy. ... In addition, 2,000 people signed up to debt relief orders, a new type of insolvency agreement introduced in April for those with relatively small amounts of borrowing.

Insolvency experts warned that the combination of rising unemployment and the lack of stigma attached to options such as IVAs and debt relief orders meant the number of people affected would go on rising.

Mark Sands, director of personal insolvency at Tenon Recovery, predicted 140,000 people would be declared insolvent during 2009, 30 per cent more than in 2006 – the worst year on record so far – when the figure was 107,000.

"The overall record level of personal insolvencies, whilst at first shocking, hides the detail which suggests the worst is yet to come," Mr Sands warned.
In the U.S., bankruptcy filings are rising sharply too, but are not are record levels because of the change to the bankruptcy law in 2005.

For the U.S., see: Personal Bankruptcy Filings up 34.3 Percent compared to July 2008

When it comes to bankruptcy (or insolvency) apparently misery does love company.