More people turn to IVAs as personal insolvency rises
More people turn to IVAs as personal insolvency rises
Tuesday 11th August 2009
That is according to the Insolvency Service (IS), which noted that in the three months to June, 12,000 people within England and Wales entered into such an agreement.
Figures released by the IS also show that the number of people declared insolvent reached its highest-ever level, with more than 33,000 becoming so in the second quarter of the year.
The record high levels equate to a 27 per cent year-on-year rise.
Furthermore, 19,000 people declared themselves bankrupt in the same period.
Unemployment has been suggested as the main reason behind the exceptionally high figures by many experts, with some suggesting that personal insolvency levels will increase to more than 130,000 by the end of the year.
Mark Sands, director of personal insolvency at Tenon Recovery, predicts that 140,000 people will be declared insolvent this year, believing that the situation will worsen before it improves.
He said: "The overall record level of personal insolvencies, whilst at first shocking, hides the detail which suggests the worst is yet to come."
If Mr Sands' prediction proves to be correct, the increased number of people facing insolvency could consider entering into an IVA and consolidate their debts to avoid insolvency or bankruptcy.
In 1999, the number of people that entered into an IVA stood at only 7195; by 2008, that figure had risen to 39,116.
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