Insolvencies hit record high
Updated on 06 November 2009
Mounting numbers of indebted Britons have sent personal insolvency figures soaring to a new high as more people succumb to the recession.
Insolvency Service statistics showed a total of 35,242 people in England and Wales were declared insolvent in the three months to the end of September - up 28% on a year earlier and the highest since records began in 1960.
A rising number of low income households opting for the Government's recently-launched Debt Relief Orders (DROs) contributed to the third quarter record.
Take-up of DROs - introduced on April 6 as an alternative to bankruptcy for people with debts of less than £15,000, assets of less than £300 and less than £50 surplus income a month - more than doubled to 4,505 in the third quarter.
The sudden leap, up from just under 2,000 in the previous three months, came after an initially slow start to DROs, which had been hampered by longer-than-expected processing after launch.
Experts warned of a grim total figure by the end of the year and further insolvency misery to come.
Marks Sands, director of personal insolvency at Tenon Recovery, said: "We have already exceeded the annual record for personal insolvencies and if this trend continues we are likely to see levels exceed 130,000 by the end of the year.
"We expect to see around 150,000 personal insolvencies next year, with record levels set to stay until 2012."
But the third quarter figures offered hope for recession-hit businesses as they revealed a slowdown in company failures for the second quarter in a row.
The number of company liquidations - in which a firm is wound up and its assets sold off - hit 4,536 in England and Wales, down 10% on the second quarter.
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