223 people per day petition for bankruptcy

- 25% increase on previous quarter

 

According to figures released by the Insolvency Service today, 35,574 people went into bankruptcy or entered into an Individual Voluntary Arrangement ('IVA') or Debt Relief Order ('DRO') in the quarter ended 31 December 2009, an increase of 24.9 per cent compared to the same quarter in 2008.

Chris Nutting, Director of Personal Insolvency at KPMG said:

"Our research shows that over 223 people a day are choosing to petition for their own bankruptcy.  The figures show that there are still many people experiencing serious financial difficulties, despite record low interest rates.

"Whilst the UK is technically out of recession, the harsh reality is that many people are still living beyond their means. Lessons from history show that personal insolvencies will continue to rise after the recession finally ends and for some time to come.  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."

DROs, which the government introduced in April 2009, allow consumers with debts of less than £15,000, and minimal assets or surplus income, to write off their debts without entering into a full blown bankruptcy. 

Chris Nutting commented:

"The numbers of DROs show that over 1300 debtors a month used this procedure in 2009 and the indications are that debtors are turning to this procedure in ever increasing numbers. If you add these numbers to the bankruptcy and IVA figures it is likely that personal insolvency in 2010 will break all records." 

 

-Ends-

 

Notes to editors


For further information, please contact
Sorrelle Cooper, Senior PR Manager: 020 7694 8527 / 07932 078218
sorrelle.cooper@kpmg.co.uk 

KPMG Press Office: 020 7694 8773

About KPMG
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with nearly 11,000 partners and staff.  The UK firm recorded a turnover of £1.6 billion in the year ended September 2009. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 144 countries and have more than 137,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  KPMG International provides no client services.