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| Bankruptcies reach record levels | Bankruptcies reach record levels |
| (about 1 hour later) | |
| The number of people being declared bankrupt in England and Wales has hit a new record, according to the government's Insolvency Service. | The number of people being declared bankrupt in England and Wales has hit a new record, according to the government's Insolvency Service. |
| In the first three months of the year there were a record 19,062 bankruptcies and 10,713 individual voluntary arrangements (IVAs). | In the first three months of the year there were a record 19,062 bankruptcies and 10,713 individual voluntary arrangements (IVAs). |
| The number of companies going bust in England and Wales fell back in the first three months of the year. | The number of companies going bust in England and Wales fell back in the first three months of the year. |
| However the figures were still 54% higher than a year ago. | However the figures were still 54% higher than a year ago. |
| The insolvency specialists Begbies Traynor predicted that personal insolvencies might rise above 125,000 this year. | The insolvency specialists Begbies Traynor predicted that personal insolvencies might rise above 125,000 this year. |
| "This reflects both the stresses of high levels of personal debt and rising unemployment and a record number of entrepreneurs going bankrupt on the back of their business's failure," said the firm's chairman Ric Traynor. | "This reflects both the stresses of high levels of personal debt and rising unemployment and a record number of entrepreneurs going bankrupt on the back of their business's failure," said the firm's chairman Ric Traynor. |
| Personal insolvency | Personal insolvency |
| In the first quarter of 2009 there were 29,774 personal insolvencies in total, 1.6% up on the previous quarter and 19% up on a year ago. | In the first quarter of 2009 there were 29,774 personal insolvencies in total, 1.6% up on the previous quarter and 19% up on a year ago. |
| The annual number of people being declared insolvent was steady during 2006, 2007 and 2008. | The annual number of people being declared insolvent was steady during 2006, 2007 and 2008. |
| But the figures started to rise in the middle of last year, reflecting the plunge of the economy into recession. | But the figures started to rise in the middle of last year, reflecting the plunge of the economy into recession. |
| Mark Sands, a personal insolvency expert at KPMG, said the numbers would grow, especially when Debt Relief Orders - for people with debts of below £15,000 - were taken into account in the future. | Mark Sands, a personal insolvency expert at KPMG, said the numbers would grow, especially when Debt Relief Orders - for people with debts of below £15,000 - were taken into account in the future. |
| FORMS OF INSOLVENCY Bankruptcy: The traditional way of escaping overwhelming debt. Ends after one year, but you are likely to lose all your assets including your house to pay something to the creditorsIndividual voluntary arrangement (IVA): A deal between you and your creditors, overseen by an insolvency practitioner. Less stigma, less chance of losing your home, but involves paying some of your debts in one go or over a number of yearsDebt Relief Orders: Introduced in in April 2009, these allow consumers with debts of less than £15,000 and minimal assets or surplus income to write off debts without a full-blown bankruptcy Coping with personal insolvency Dealing with company insolvency | FORMS OF INSOLVENCY Bankruptcy: The traditional way of escaping overwhelming debt. Ends after one year, but you are likely to lose all your assets including your house to pay something to the creditorsIndividual voluntary arrangement (IVA): A deal between you and your creditors, overseen by an insolvency practitioner. Less stigma, less chance of losing your home, but involves paying some of your debts in one go or over a number of yearsDebt Relief Orders: Introduced in in April 2009, these allow consumers with debts of less than £15,000 and minimal assets or surplus income to write off debts without a full-blown bankruptcy Coping with personal insolvency Dealing with company insolvency |
| "What we are seeing is actually record levels of personal insolvency," Mr Sands said. | "What we are seeing is actually record levels of personal insolvency," Mr Sands said. |
| "Debt Relief Orders introduced just a month ago are going to add to what makes these figures and take them to even higher levels," he added. | "Debt Relief Orders introduced just a month ago are going to add to what makes these figures and take them to even higher levels," he added. |
| Corporate insolvency | Corporate insolvency |
| There were 1,783 corporate insolvencies such as receiverships and administrations in the first three months of the year, 27% fewer than in the last quarter of 2008. | There were 1,783 corporate insolvencies such as receiverships and administrations in the first three months of the year, 27% fewer than in the last quarter of 2008. |
| But Alan Tomlinson of insolvency specialists Tomlinsons said this dip was not the start of a new downward trend. | But Alan Tomlinson of insolvency specialists Tomlinsons said this dip was not the start of a new downward trend. |
| "Today's statistics firmly squash the notion that there are any green shoots of recovery out there," he said. | "Today's statistics firmly squash the notion that there are any green shoots of recovery out there," he said. |
| Struggling to afford bankruptcy | |
| "Since last autumn many of the companies we are seeing have suffered significant drops in turnover that they have been unable to replace. | "Since last autumn many of the companies we are seeing have suffered significant drops in turnover that they have been unable to replace. |
| "I simply cannot foresee there being a slowdown in the rate of company insolvencies until the middle of next year," he added. | "I simply cannot foresee there being a slowdown in the rate of company insolvencies until the middle of next year," he added. |
| The number of company liquidations in England and Wales, the end stage of the process for companies, saw a continued increase. | The number of company liquidations in England and Wales, the end stage of the process for companies, saw a continued increase. |
| There were 4,941 compulsory liquidations and creditors' voluntary liquidations. | There were 4,941 compulsory liquidations and creditors' voluntary liquidations. |
| That was 7.1% more than in the previous three months, and 56% more than a year ago. | That was 7.1% more than in the previous three months, and 56% more than a year ago. |