- Inflationary pressures on household budgets mean debtors likely to breach repayment plans, warns KPMG
According to figures released by the Insolvency Service today, 30,219 people went into bankruptcy or entered into an Individual Voluntary Arrangement (‘IVA’) or Debt Relief Order (‘DRO’) in the quarter ended 30 September 2011, an overall decrease of 11 per cent compared to the same quarter in 2010. The number of Bankruptcy Orders has fallen dramatically, the number of people entering IVAs has remained static but the number of people entering DROs (first introduced in April 2009) continues to rise rapidly.
Chris Nutting, Director of Personal Insolvency at KPMG said: “Today’s figures show that the latest bankruptcy numbers 9567 are falling to levels last seen in 2004. And whilst this may seem to be good news on the face of it, it fails to reflect the number of people with severe personal indebtedness.
“There is a growing number of individuals with large amounts of unsecured debt looking for some resolution of their financial problems which have simply not gone away.
“And while creditors are willing to set up repayment plans with debtors, the continual pressure on household budgets due to the price increases of fuel, energy and food means that even agreed repayment plans will be broken. This is likely to result in more debtors eventually turning to a formal insolvency procedure to resolve their financial problems.
“It is vital that debtors consult with their creditors at the earliest opportunity when faced with financial problems and seek proper advice as to the options available to them.”
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For further information please contact:
Margot Cowhig, KPMG Corporate Communications
Tel: 0207 694 4246 Mobile: 07920 274856: margot.cowhig@kpmg.co.uk
KPMG Press Office: 0207 694 8773
Notes to editors.
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with nearly 11,000 partners and staff. The UK firm recorded a turnover of £1.6 billion in the year ended September 2010. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 150 countries and have more than 138,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.
