Insolvencies soar as debt hits home

INDIVIDUAL insolvencies have soared by nearly a third in England and Wales as the huge consumer debt continues to hit. Statistics published by the Department of Trade and Industry revealed there were 11,967 individual insolvencies in the third quarter of 2004, a 31.1% increase compared with the same period on a year ago.

More than 9,000 of these were bankruptcies, a year-on-year increase of 28.5%, with 2,811 Individual Voluntary Arrangements.

The figures added to the growing concern that people are straining under the weight of the UK‘s £1 trillion consumer debt mountain.

Thousands of individuals are declaring themselves bankrupt to escape the creditors knocking at their door.

Citizens Advice Bureau senior policy adviser Peter Tutton said: 'The evidence we are getting at the Bureau is that people have higher levels of debts and are struggling with them.

'It‘s not surprising when consumer debt is at such a high level that bankruptcies are on the rise.'

The figures show company liquidations were down by 5.6% to 2,975 for the three months to the end of September.

This was made up of 1,136 compulsory liquidations, a fall of 2% on the previous quarter and a reduction of 1.5% on the corresponding quarter of last year, and 1,839 creditors voluntary liquidations, a decrease of 7.7% on the previous quarter and 17.4% on the corresponding quarter of last year.