Debts are at record
PUBLISHED: 12:06 11 August 2006 | UPDATED: 19:47 01 June 2010
THE number of people in England and Wales unable to pay off their debts surged to a record in the second quarter, and home repossessions jumped by about a fifth, according to figures released by the Government. But the number of companies declaring insolv
THE number of people in England and Wales unable to pay off their debts surged to a record in the second quarter, and home repossessions jumped by about a fifth, according to figures released by the Government.
But the number of companies declaring insolvency fell.
The Insolvency Service said 26,021 individuals had declared themselves insolvent by the end of June, up 66.3 per cent on the year and 10 per cent on the first three months of this year.
Mortgage possession actions rose 17 per cent on the year to 33,180, according to the Department for Constitutional Affairs, and orders for repossession jumped 21 per cent.
Difficulties facing people with debts will be further aggravated by the Bank of England's shock move on August 3 to raise borrowing costs.
With unemployment continuing to rise, and utility bills soaring, many home owners are stretched to the maximum and debt bills are at record levels.
It seems highly likely that individual insolvencies and mortgage repossessions will climb markedly further over the coming months.
The figures further illustrate the bleak picture of personal debt depicted by many banks who have reported a marked increase in bad debts.
Changes to bankruptcy laws have made it easier for people to declare bankruptcy or to reach individual voluntary arrangements to pay part of their debt over time.
Of the 26,021 individual insolvencies reported, more than 11,000 were voluntary arrangements while the remainder were bankruptcies.
But company liquidations fell 4.9 per cent on the quarter according to the DTI.