Unemployment ‘will lead to more personal insolvencies’

Personal insolvencies are likely to remain high in the coming months as significant levels of unemployment continue.

This is the view of Chris Tapp, director of Credit Action, who was speaking in response to recent figures from the Insolvency Service that showed individual insolvencies have increased by 17.9 per cent in 2010.

The industry figure cited cuts in jobs, working hours and wages as key reasons for the rise.

“We will still continue to see personal insolvencies very high for some time until employment begins to filter back into the system and more people can get back into jobs,” he remarked.

Mr Tapp added that while there are significant numbers of individuals struggling to find a place of work, there is going to remain the very real prospect of debt difficulties.

The statistics released by the Insolvency Service revealed there were 35,682 individual insolvencies in England and Wales in the first quarter of 2010.

By Joe Shervin