Swindon bankruptcies on the increase (From Wiltshire Business Online)

Swindon bankruptcies on the increase

KPMG's analysis of the official insolvency figures from the Ministry of Justice shows that the number of people declaring themselves bankrupt over the last quarter rose in Swindon, in line with the national trend.

The statistics released today show a 33% increase in people petitioning for their own bankruptcy, as opposed to being forced into bankruptcy by a creditor, to 128 cases in the three months ended September 2009 compared with the same period last year. Nationally, the Ministry of Justice figures show that the three months ended 30 September 2009 saw a substantial increase of 18% in the number of people making themselves bankrupt in England and Wales compared to the same quarter of last year.

At the same time there was also an increase in the use of Individual Voluntary Arrangements - IVAs - which rose 21% compared to last year, according to the figures from the Insolvency Service.

The figures reveal that 16,266 people successfully petitioned the Court to bankrupt themselves, following last week’s Insolvency Service statistics which showed that 12,390 agreed an IVA in the same quarter.

In addition, a new insolvency procedure called the Debt Relief Order (‘DRO’) which the government introduced in April this year, allows a consumer with debts of less than £15,000, and minimal assets or surplus income, to write off debts without entering into a full blown bankruptcy.

This new procedure was used by 4,505 people in quarter three, more than double the number who used the procedure in the period from April to June 2009. Adding the three numbers together reveals that 33,161 people chose to pursue an insolvency procedure in the last quarter John Bangham, Director of Personal Insolvency at KPMG’s Bristol office said: “Personal insolvencies are continuing to increase and it appears that there is no obvious end in sight.

"Our analysis of the figures shows that over 500 people a day are choosing formal insolvency procedures such as bankruptcy, DROs or IVAs to solve their financial problems.

"This is a huge number of people who are trying to juggle their debts on a daily basis.

“Looking ahead, it’s clear that the economic climate needs to begin to turn around before we see these figures beginning to stabilise, and with unemployment numbers still rising and minimal pay rises for those in employment, this may not happen for at least 12 months time.

"The trend for 2010 appears to be more of the same.”