Insolvencies fall during second quarter of year
October 1, 2007
According to official figures released by the government recently the level of insolvencies within the UK has taken a tumble during the second quarter of 2007 compares to the first three months of the year.
Figures were released by the Insolvency Service, which is a government agency, and the figures showed that there was a reduction in the number of insolvencies during the second quarter compared to the first quarter of 8%, with just under 27000 people being declared bankrupt of taking out an Individual Voluntary Arrangement (IVA) during the second quarter.
The breakdown showed that there was a 3% fall in the number of bankruptcies in the second quarter of the year compared to the first quarter, and a sizeable 15% reduction in the number of IVAs in the second quarter compared to the first. However, many experts believe that the difficulties and barriers that creditors place in the way of those trying to opt for IVAs could contribute to the fall in figures. The rise in the interest in IVAs along with the number of companies providing assistance to those looking to opt for IVAs has resulted in creditors taking a far firmer stance.
Although there has been a drop in the number of insolvencies in the second quarter of this year experts predict that there is worse to come, and that millions are still struggling with debt. In fact, recent reports have suggested that by the end of this year bad debt levels could rocket.
One insolvency expert stated: ‘It may look as if personal insolvencies have finally reached a plateau, however evidence points to a peak still being someway off. The existing mountain of debt still stands, consumer spending remains unabated and there is a strong likelihood of more interest rate rises, not to mention previous ones still having to filter through the system, which will cause more individuals to resort to bankruptcies and IVAs.’
Alan Wright
1st October 2007
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