Personal insolvencies rise among those struggling with debt management
Personal insolvencies rise among those struggling with debt management
Friday 5th February 2010
The Consumer Credit Counselling Service (CCCS) has reported a dramatic rise in personal insolvencies during the past year, with an annual increase of 93 per cent in overall insolvency recommendations.
The charity states that it recommended insolvency to 38,663 of its clients in 2009, compared to 20,516 in 2008.
Some 20,659 people approaching CCCS for help with their debt problems were recommended bankruptcy last year, 11,877 Individual Voluntary Agreements (IVA) and 7,127 Debt Relief Orders (DRO).
This signals a 31 per cent annual increase for bankruptcies, and a 148 per cent rise in IVAs compared to 2008.
CCCS director of external affairs Delroy Corinaldi said the figures highlighted the high numbers of people still experiencing unmanageable debt, despite the positive signs in the economy.
The organisation welcomed the revised IVA protocol that has been recently introduced by the Insolvency Service, resulting in a "more effective IVA process for all parties and ideally reduce costs".
Director of personal insolvency at KPMG Chris Nutting told the Telegraph that despite record low interest rates many people are in fiancial strife.
"Lessons from history show that personal insolvencies will continue to rise after the recession finally ends and for some time to come," he said.
"If, as predicted, there are rises in tax and reductions in public sector spending, a lot of people will need to take drastic action to resolve their financial problems, such as applying for bankruptcy."
News article brought to you by Debt1 - UK Debt Management Specialist
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