As debt struggles become a way of life for many people, the number of bankruptcy orders and Individual Voluntary Arrangements (IVAs) are expected to rise this year, according to 70% of Insolvency Practitioners (IPs).
The survey, by trade body for insolvency professionals R3, revealed that 68% of IPs predict that we could see the jump in the number of people declaring insolvency within the next six months.
The effects of the credit crunch are already taking a grip as the need for debt advice increases. A third of those surveyed said that there has already been an increase in the number of people who have fallen behind with their debts in the past three months. This jump is being blamed on the reliance of debt in order to afford the cost of living and that being in debt has become a way of life for many.
It is not only personal insolvency which is predicted to rise, as 90% of IPs are expecting to see an increase in business insolvencies during the next 12 months. Nick O’Reilly, president of R3, said: “Out of those, construction, retail and leisure are looking especially vulnerable. The fact that nine in ten Insolvency Professionals in the UK believe that in 12 months time they will be dealing with an increase in business insolvencies indicates we are unfortunately in for a long period of protracted pain. Our results show trends months ahead of official national statistics.”