This makes for some sober reading, particularly if looking at the total number of individual  insolvencies- the figure is an astounding 134,142- an increase of 26% from last year. Representing:

74,670 bankruptcies

47,641 IVA’s

11,831 DRO”s

This is the highest total since official records began in 1960.

Albeit that the economy is slowing recovering, people made unemployed or redundant last year are still feeling the effects, not helped by lenders and institutions taking a hard line with individuals.

Creditors have also started to get tough, according to Louise Brittain of Deloitte. This was reflected in the jump in IVAs, when individuals come to an official deal with their creditors.

“This is a result of increased creditor pressure which is unlikely to let up any time soon, and highlights the desperate financial difficulties facing individuals,” she said.

She added that the rise at the end of 2009 was surprising given that many people tended to delay dealing with acute debt issues until after Christmas. IVAs could also have risen as people cutting hours instead of being made redundant had some funds to pay back debts instead of going bankrupt. Many experts have suggested that there will be more pain to come despite the UK coming out of recession.

“We expect to see the numbers continue to rise as the upwards trend in personal insolvencies traditionally continues for nearly three years after the worst of a recession has passed,” said Pat Boyden, from accountancy firm PricewaterhouseCoopers.  (source BBC news)

B Layne

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