Personal insolvency figures soar in fourth quarter

Figures from the Insolvency Service today highlighted the impact that the recession has had on many individuals.

According to the organisation, the number of people declared insolvent in England and Wales reached a record high in the last three months of 2009.

There were 35,574 people declared insolvent in the last three months of the year - a rise of 24.9% on the year.

However, the Insolvency Service attributed this to the new style Debt Relief Orders (introduced in April 2009), which allow individuals with debts of less than £15,000 and a low income, to write off their debts rather than being declared bankrupt.

Meanwhile, on annual basis, there were a record 134,142 people declared insolvent in England and Wales - this far exceeded the previous record of 107,288 in the 2006 year.

For the whole of 2009, the number of firms being liquidated (the final stage of the insolvency process) reached 19,077 - a 23% rise against 2008.

However, in the last three months of 2009, the number of companies being liquidated fell to 4,566, a fall of 2% on the previous quarter and 1% lower than a year earlier.

Commenting on the figures, Pat Boyden, from accountancy firm PricewaterhouseCoopers, said: “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.”

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