Personal Insolvency in the UK is on the Rise

In the last quarter of 2009, England and Wales saw the number of people that were declared insolvent each its highest number of all time. The Insolvency service has released figures that show that more than 35,000 people had to declare insolvency in the final three months of the calendar year, which is a staggering increase of 25% from the year before. On top of that, more than 6,355 businesses were forced to declare bankruptcy in the same time period which was also a record.

For the entire year of 2009 there were over 134,000 that were declared insolvent in the UK which was a 26% increase from the year before and almost 30,000 more than the previous record which was seen in 2006.

Many people thought that record low interest rates would have saved a lot of people from being declared as insolvent, but the increase of long term unemployment just meant that some people did not have the chance to fight back and compile enough money to pay off their debts. Due to these new increases many creditors have tightened the reins on consumers and started to act a lot tougher. The increase in toughness by creditors could have a lot to do with the increase in individual voluntary agreements, but the increase in the last few months of the year was surprising as usually people wait until after Christmas to deal with their debt issues.

IVAs may also have risen as more people seem to be aware of their options and want to pay back some debt rather than go bankrupt. No matter how you look at, most people agree that there is a lot more to come for UK consumers before things get better and we actually find a way to climb out of the recession.