July 31 2014 Latest news:

The number of people declared bankrupt has risen for the first time in a year, leading to gloomy predictions that insolvency rates are set to worsen.

To send a link to this page to a friend, you must be logged in.

Bankruptcies rose by 5.5pc during the first three months of 2012 to reach 9,132, ending a trend of quarterly improvements, according to figures published by the Insolvency Service.

Meanwhile, the number of debt relief orders (DROs) increased by 7.3pc on the previous quarter, to reach a record high of 7,897.

The overall number of personal insolvencies fell by 1.2pc in the first three months of this year, thanks to a 10pc drop in individual voluntary arrangements (IVAs), to 11,694. In total, there were 28,723 personal insolvencies in England and Wales during the first quarter of the year – a 4.7pc drop on the same period a year ago.

But despite this overall fall, analysts said the outlook remained grim.

“While this news may be a glimmer of hope in the same week it was announced the UK has entered a double-dip recession, it’s likely the light will be extinguished in the coming months,” said Michael Ossei, personal finance expert at Uswitch.com.

“Ten mortgage providers have already announced rate increases, which will see millions of consumers’ monthly mortgage payments increase.

“We have also seen interest-only mortgages – which can be a lifeline for those suffering a sudden drop in income – being pulled from the market.

“The next insolvency figures are likely to tell a different story. What’s vital is that consumers act now to protect themselves from any rising living costs by stripping back the essentials and saving money where they can.”

David Mond, chief executive of debt-management company Cleardebt, said: “The increase in bankruptcies and DROs between the end of 2011 and the beginning of 2012 indicates a worsening in the circumstances of many indebted individuals, and that some are giving up all hope of repaying their debts and are electing to become insolvent instead.

“While, year on year, personal insolvencies are down, I don’t believe that fee-charging debt-resolution companies are seeing a fall in demand for our services.”

Steve Rees, managing director of debt consultant Vincent Bond & Co, said: “The statistics for the first quarter of 2012 show that the number of insolvencies has fallen, which is great news, especially considering the recent depressing news that we are in a double-dip recession.

“But it is important to remember that these numbers do not include informal debt plans, and insolvencies are still at a record high and have been since the start of the recession in 2008.

“Nationally, 23 million of us are still struggling with unsecured debt, and almost a million people will need help with managing payments on debt this year.

“With wages staying stagnant and the cost of living on the rise, it is no wonder that many people are finding they can pay back only the minimum monthly repayments on their debts.”

Latest London news


London Bloggers

Thursday, July 24, 2014
London comedians are preparing for Edinburgh (Photo by Jeff J Mitchell/Getty Images)

During these sultry July afternoons and endless balmy evenings the nervous musings of young comedians in London drift to dreams of triumph on the Edinburgh stage.

Thursday, July 24, 2014
Punchdrunk's The Drowned Man poduction came to an end on Sunday, July 6

If you’ve been wandering around bereft of purpose, a wet-eyed stare fixed on your blank face, then no doubt you too are as gutted as I am that The Drowned Man has finally come to an end.

Thursday, July 24, 2014
(Photo by Joern Pollex/Getty Images)

We’ve been called P.I.G.S.


Other articles

LDN24 Promotions


Renault ZOE is perfect electric supermini for short to mid-range commuters

The Renault ZOE follows on from the introduction of the electric Fluence ZE and Twizy, but unlike the former, the Zoe was designed from the ground up as an electric vehicle.

Read full story »