Insolvencies: More people likely to be made bankrupt

THE number of people declared insolvent in England and Wales fell by 2.6 per cent during the second quarter of the year, figures showed today.

A total of 34,743 people were made insolvent during the three months to June, down from 35,682 in the previous quarter.

But the latest figure is still a 5 per cent increase on the same period in 2009, the Insolvency Service said.

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The number of companies put into administration in the latest quarter was recorded at 4,080 – up 0.5 per cent on the revised figures for the first three months of the year, but down almost a fifth on

corresponding figures for last year.

Broken down, the figures revealed that 14,982 people went bankrupt in the spring months, down 20.6 per cent year-on-year, a marked decrease on the 18,256 recorded in the first three months of 2010.

But the number of people taking out individual voluntary arrangements (IVAs) increased to 13,466 in the latest quarter – up 10 per cent on last year.

Insolvency practitioners warned yesterday's figures may be only a temporary reprieve as swingeing Government spending cuts could force many more people into insolvency as they lose their jobs.

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Frances Walker of the Consumer Credit Counselling Service said: "I think we are going to see more people being declared insolvent, and it will especially affect women as there are a lot of women employed in the public sector.

"They are not all high-paid civil servants sitting on a good pension – there are a lot of lower paid people in the public sector as well."

Ms Walker added that self-employed individuals may also feel the squeeze in the months to come.

Yesterday's statistics also show a continued growing trend of people being granted debt relief orders.

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The orders offer 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. In the three months to June, 6,295 orders were granted, up from 5,644 in the previous quarter.

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