Insolvencies ‘will reach record highs’ in 2009

Personal insolvencies have been predicted to continue rising throughout 2009.

Figures from the Insolvency Service revealed that a record number were seen in the first quarter of the year, with bankruptcies and Individual Voluntary Arrangements (IVAs) up 23.4 per cent and 11.8 per cent respectively, compared to the same period in 2008.

And KPMG has suggested that the economic downturn will see unemployment and negative equity combine to create a greater need for debt help and bankruptcy advice.

The professional services firm expects more than 150,000 people to enter into an IVA or debt relief order – or be declared bankrupt – by the end of the year, with the Insolvency Service finding that there have already been 29,744 in the first three months.

Director of personal insolvency at KPMG Mark Sands said the statistics were “no surprise”, adding: “Despite the credit crunch, levels of consumer debt in the system remain at record levels.”

By Andy Mackay