High bankruptcies and IVA's delivered as expected, November 03 2006

In quarter three of 2006 there were a total of 15,416 bankruptcies. This is a represents a remarkable increase of 55.5% on the same period in 2005. When you add this to the 12,228 people who opted for Individual Voluntary Arrangements (IVA's) there were a total of 27,644 individual insolvencies for the Q3 period. Thus, over indebted UK citizens are well on target for the 100,000 individual insolvencies predicted for this year.

IVA's are an alternative to bankruptcy that is currently very heavily advertised. Many people blame this advertising for the recent decrease in the gap between the number of people going bankrupt and the number opting for IVA's. More people are responding to these adverts and choosing an IVA to deal with their debt. As a result there has been much controversy and scepticism within the finance industry, particularly by the lenders who stand to lose.

To compliment these prompts for action people may soon be forced into a debt solution due to the August interest rate rise and the widely expected increase later this year. Property repossessions are also on the increase demonstrating the increasing number of people who are unable to meet their financial commitments.

Over the next couple of years it is expected that the high number of insolvencies will continue.