Statistics released today from the Insolvency Service have revealed that the number of insolvencies in the UK is rising significantly.
According to the figures, individual insolvencies in the UK hit 27,087 in the third quarter of 2008, up by 8.8 per cent from the previous quarter and 4.6 per cent year on year.
Of the insolvencies, there were 17,341 bankruptcies, up 9.5 per cent year on year, and 9,746 Individual Voluntary Arrangements (IVAs), up 3.1 per cent year on year.
Commenting on the bankruptcy
statistics, director of personal insolvency at KPMG, Mark Sands, said: "The downturn and the associated increases in unemployment are starting to have an impact. This is being seen not only in the increase in personal insolvencies but also in the related issues of increased mortgage possessions and the greater use of charging orders by unsecured lenders who have not been paid.
"Whilst consumers will fight to keep their family homes, and both lenders and the courts have systems in place to ensure that possession is the last resort, once the property is sold there is often little reason for someone with other significant debts not to declare themselves bankrupt."
Commenting on debt and its side-effects, personal finance manager at uSwitch.com, Louise Bond, added: "At the moment, consumers are being hit from every angle with price hikes across all areas. This may be making many people feel that their finances are simply out of control."
Commenting on the responsibility of the banks which have so far not been playing fair when it comes to passing on rate cuts and been quick to repossess homes, Ms Bond added: "Banks have a duty to help people in financial hardship and free debt advice
is available from organisations such as the Consumer Credit Counselling Service, National Debtline and Citizen's Advice
. I would strongly urge people to start taking action before they reach financial breaking point."
The statistics also show that company insolvencies have risen by 26 per cent year on year. According to the figures, there were 4,001 compulsory liquidations and creditors' voluntary liquidations in the UK between July and September this year.
As the UK heads towards a recession it has become clear that there are not many companies immune to a downturn. In fact, the only exceptions so far have been discount stores such as the supermarket Aldi and high street clothes shop Primark.
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