Bankruptcy in 2008
The number of people applying for bankruptcy increased by 7% during the third quarter of the year, figures showed today, offering further evidence of the impact of the financial downturn on consumers.
A total of 13,653 people in England and Wales petitioned for bankruptcy in the three months to the end of September, 7% more than during the same period of 2007 and 1% more than during the previous quarter.
The figure was also the second highest recorded by the Ministry of Justice since it began collecting data in its current format in 1995.
However, experts suggest more people will be forced to petition for bankruptcy over the coming months as they are squeezed by a combination of higher living costs and a lack of cheap credit.
Lenders have also been cracking down on individual voluntary arrangements (IVAs), where debtors enter into a formal arrangement to pay off a percentage of their debts, with many raising the amount they are willing to accept as a repayment.
Last week, the Insolvency Service said 27,087 people had been declared insolvent in the third quarter of the year.
Both sets of figures are likely to increase next year as lenders' continued reticence to offer consolidation loans to borrowers, and rising unemployment push more people into financial difficulties.
(Friday, November 14, 2008)