New figures reveal that the number of personal insolvencies in England and Wales jumped sharply in the third quarter of 2008 as the effects of the credit crunch filtered down to consumers.
Statistics released by the Insolvency Service show 27,087 individual insolvencies in the period: an increase of 8.8% on the previous quarter and an increase of 4.6% on a year ago.
The figures are made up of bankruptcies and Individual Voluntary Arrangements (IVAs), a less onerous version of bankruptcy.
Bankruptcies were up 12.1% on the previous quarter at 17,341. IVAs, after a period of falling popularity and a more aggressive attitude by lenders, have started to rise again, up 3.3% on the previous quarter at 9,746.
Which? Researcher Martyn Saville said, ‘If you’re struggling with debts, including mortgage repayments, don’t bury your head in the sand. While this week’s reduction in the Bank of England’s interest rate to 3% will bring welcome relief to borrowers, finances are still tight for many families. If you’re struggling to cope financially, don’t hide away, and don’t be tempted to approach a commercial debt management company – there are better alternatives available for free elsewhere, including the Consumer Credit Counselling Service, Citizens Advice, Citizens Advice Scotland and National Debtline.’
For more information and contact details, read the Which? reports on dealing with debt and coping with the credit crunch.