Bankruptcies could be set to rise in 2008
January 3, 2008
Over recent years bankruptcy and insolvency levels have caused concern in the UK given the high levels of consumer debt. However, it seems that the problem with bankruptcies may be set to get worse, with some experts predicting that up to 130,000 borrowers could end up declaring themselves insolvent in 2008 either through entering into an Individual Voluntary Arrangement (IVA) or by declaring themselves bankrupt.
One of the companies that predicts personal insolvency levels will rise in the coming year is KPMG, the global accountancy company. Officials from the firm have indicated that a number of factors will add to the increased risk of higher insolvency levels amongst residents in the UK, and this includes more difficult financial management in households, increased outgoings such as mortgage repayments, food, and petrol, tighter credit conditions making it more difficult for consumers to get finance, and a high level of consumers spending over the Christmas period.
Close to 110,000 consumers declared themselves bankrupt or entered into an IVA in 2007, and if the figures does reach 130,000 for 2008 this could represent a rise of nearly 20%. The majority of insolvencies in 2007 were bankruptcies, although over 40,000 were IVAs. Officials indicate that on average people on IVAs owe £50,300 with around 2500 people owing more than £100,000.
One official from KPMG stated: “This high average level of debt clearly indicates that too many people have borrowings that they have no realistic hope of repaying. Any excessive spending over Christmas and at the New Year sales, especially where goods are paid for on credit, risks tipping even more consumers over the edge.”
Related Articles
- 2008 could see personal insolvency levels rise According to some industry experts this coming year could see the level of personal insolvencies in the UK rocket, with around 130,000 already heading towards
- Reuters poll predicts two interest rate cuts in 2008 According to a poll carried out by Reuters the Bank of England should be cutting interest rates twice in the coming year. The poll involved
- IVA governing body thinking of suing banks A governing body for a number of IVA companies is thinking of suing banks in the UK for hindering IVA cases and forcing an increase
- Insolvencies fall during second quarter of year 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
- ISAs: New limits for 2008 In a recent report the new savings and investment limits for ISAs for next year have been outlined. The changes to these savings and investment
Comments
Got something to say?