Audit and accountancy firm KPMG has predicted 2009 will see a further 150,000 people declare themselves insolvent as debts mount up due to the economic downturn and the increase in risk of unemployment.
Speaking following the release of figures from the Insolvency Service suggesting bankruptcy has increased by 12 per cent over the last three months, director of personal insolvency at KPMG Mark Sands noted that many consumers with mortgages are turning to Individual Voluntary Arrangements (IVAs) as a result of mounting debt.
“Whilst consumers will fight to keep their family homes … once the property is sold there is often little reason for someone with other significant debts not to declare themselves bankrupt,” he explained.
And research by the company revealed that, on average, those entering into an IVA during the third quarter of 2008 owed £48,400.
Louise Bond of uSwitch.com recently urged those struggling with their finances to seek debt advice from free organisations such as National Debtline or Citizens Advice.
By Tom Musk