Bankruptcies expected to show rise

A year-long decline in the number of people declared bankrupt is expected to end today as fears grow over the impact of Britain’s return to recession.

The latest Insolvency Service figures for the first quarter of the year are likely to show a rise in bankruptcies, the Insolvency Practitioners Association said.

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The number of bankruptcies is predicted to be around 9,500, which would put it below the 12,539 recorded in the first three months of last year; this dropped to 8,626 in the final quarter of 2011, the lowest since spring 2004.

Continued low interest rates meant bankruptcies fell sharply last year, dropping by almost a third in 2011 on a year earlier and hitting their lowest levels since 2004.

However, with unemployment rising and banks tightening lending criteria there are fears the improved trend is about to end.