2010 Could be the Year that Bankruptcy Rates Reach 24,000

Several reports that have surfaced recently are showing that hundreds of people within Scotland are going to go bankrupt or continue dealing with bankruptcy each and every week. Many business advisers are saying that at least 24,000 people will declare bankruptcy which is double the 13,000 that were affected by bankruptcy in 2007.

PKF has gone so far as to warn that this pattern and increase in bankruptcy could continue for at least a few more years as the recession impact will leave the UK reeling for years to come. The corporate recovery partner for PKF Bryan Jackson believes that these bankruptcy numbers are in large part thanks to many Scottish citizens obsession with debt over the last 10 years or so. Considering the fact that Scottish bankruptcy is running twice as high as Wales and England at the moment, it is obvious that this issue is going to be a problem for years to come.

The good news that comes out of this is the fact that it doesn’t appear that insolvency and bankruptcy are on the rise any longer. If they flatten out at 24,000 it is much better than a continuous increase that the country is used to seeing over the past two years. Some people are arguing back saying that more people are claiming bankruptcy simply based on the ease of the process, and not due purely to debt.

However, these numbers still show a definitive rise in personal indebtedness that other countries simply are not dealing with. No one can deny the fact that the estimated 460 people in Scotland that go bankrupt each week is a staggering number, and it is going to take a lot of work to get away from the problems.

The figures used by experts to make these predictions have been taken from the Edinburgh Gazette, where all personal bankruptcies are forced to be listed by law. PFK continued to warn that things are going to get worse before they get better for homeowners as interest rates and unemployment are most likely going to continue to rise for quite some time. This could force many homeowners into some serious financial decisions involving bankruptcy, but there is hope that reduced mortgage costs could save a lot of people.

The stagnant housing market is one of the reasons why so many Scots are having to turn to bankruptcy. In previous years many people would use their properties to help pay off their debts, but the economy has simply not made that such an affordable option anymore.

It may be hard for a lot of people in the UK to feel good about the future, or find ways to deal with their debt. Things are expected to get much better, but the sad news as pointed out by Jackson is the fact that these numbers should remain the same for quite some time. The credit boom and long term impact of the recession are going to mould the future of the UK and many people are just going to have to ride it out.