Insolvencies ‘to reach record levels’ in 2009

High levels of debt and an uncertain outlook for 2009 are likely to lead to ‘record levels’ of personal insolvencies this year, according to professional services firm KPMG.

KPMG expects to see over 150,000 people entering into an Individual Voluntary Arrangement (IVA), being declared bankrupt or entering into a Debt Relief Order (to be introduced in April).

“Any excessive spending over Christmas and at the New Year sales, especially where goods are paid for on credit, risks tipping even more consumers over the edge,” said Mark Sands, Director of Personal Insolvency at KPMG.

“Those carrying high levels of debt will be ill-equipped to tackle the effects of the downturn such as a reduction in income or a period of unemployment. Many faced with these difficulties will find that their options may be limited – formal insolvency will, for many, be the only way out.”

According to the latest insolvency statistics from the Insolvency Service website, there were around 100,000 individual insolvencies in England and Wales in the latest 12-month period for which figures are available (Q4 2007 - Q3 2008 inclusive).

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