Insolvencies at a record high
Individual insolvencies are at a record high with an average of 330 people going bust everyday, with the latest insolvency data for the first three months of 2009 showing a 19 percent year-on-year rise inclusive of Individual Voluntary Arrangements (IVAs) and bankruptcies.
KPMG has stated that 51 per cent of people entering into IVAs are homeowners, which is a 34 percent increase from the same period last year as the value of UK homes and the equity that people hold has fallen.
Insolvency specialists Begbies Traynor has predicted that personal insolvencies might go above 125,000 this year, but the number of companies hitting the wall in England and Wales has actually fallen.
Mike Gerrard of Grant Thornton has said that due to the high levels of unemployment, the number of sole traders becoming insolvent is likely to continue to rise over the next few months.
This latest insolvency data reveals that the economy is not at a point of recovery yet, according to Alan Tomlinson, of insolvency practitioners Tomlinsons.
Of the insolvencies, 19,062 were bankruptcies whilst IVAs were up by 11.8 percent compared to 2008.