We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
Debate House Prices
In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non MoneySaving matters are no longer permitted. This includes wider debates about general house prices, the economy and politics. As a result, we have taken the decision to keep this board permanently closed, but it remains viewable for users who may find some useful information in it. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
Huge rise in companies going bust
IveSeenTheLight
Posts: 13,322 Forumite
There has been a huge rise in the number of firms going bust in England and Wales because of the recession.
Figures from the government's insolvency service show that in the last three months of 2008 there were 2,428 corporate insolvencies.
That was a 220% rise on the same period the year before.
In the same period, 29,444 people were made bankrupt or entered an individual voluntary arrangement (IVA), 19% more than a year ago.
Of those, 19,100 were bankruptcies while 10,344 were IVAs.
We are now seeing victims of the recession - professionals, traders, contractors and people who have been laid off - not just people who have overspent on a credit card 
Pat Boyden, PwC
Corporate liquidations, the end stage of the insolvency process, also rose strongly, with 4,607 firms being wound up in England & Wales in the last three months of 2008, 52% more than a year before.
Downturn
The figures from the Insolvency Service highlight the toll that has been taken on companies by the rapid lurch into recession.
"For corporate insolvencies this is almost a direct consequence of the economic downturn," said Pat Boyden, an insolvency expert at accountants PwC.
FORMS OF INSOLVENCY
Bankruptcy: The traditional way of escaping overwhelming debt. Ends after one year, but you are likely to lose all your assets including your house to pay something to the creditors
Individual voluntary arrangement (IVA): A deal between you and your creditors, overseen by an insolvency practitioner. Less stigma, less chance of losing your home, but involves paying some of your debts in one go or over a number of years
Debt Relief Orders: Planned for introduction in April 2009, these should allow consumers with debts of less than £15,000 and minimal assets or surplus income to write off debts without a full-blown bankruptcy
Over the whole of 2008, the number of firms that were liquidated rose by 24% to 15,535.
That amounted to one in every 150 trading companies.
"Liquidations in the fourth quarter of 2008 were dramatically up on liquidations in the same quarter of the previous year," said Alan Tomlinson of Tomlinsons, a licensed insolvency practitioner.
"It is the small and medium-sized business, which forms the backbone of the UK economy, that has suffered the most and I expect this situation to deteriorate even further in 2009," he added.
The number of other corporate insolvencies - receiverships, administrations and company voluntary arrangements - also shot up, rising by 92% to 6,276.
Personal insolvency
The number of people who were declared insolvent stood at 106,544 in England and Wales, was roughly the same as in 2007.
But within that, the number of bankruptcies reached a record level, both for a year and a quarter.
"We are now seeing victims of the recession - professionals, traders, contractors and people who have been laid off - not just people who have overspent on a credit card," said Mr Boyden.
"I think bankruptcies will go much higher in 2009," he added.
He explained that it was now more difficult to arrange an IVA as the recession meant that people in financial trouble were less likely to be able to offer their creditors some repayments.
As a result, more people on the verge of insolvency are likely to go directly into bankruptcy.
"What today's figures mean is that in 2008 we saw a staggering 350 people becoming insolvent in the UK every day," said Nick O'Reilly, president of the insolvency professionals' trade body R3. "The outlook is bleak for the next two years, when insolvency practitioners expect to see in excess of 158,000 personal insolvencies annually," he said.
http://news.bbc.co.uk/2/hi/business/7874026.stm
Figures from the government's insolvency service show that in the last three months of 2008 there were 2,428 corporate insolvencies.
That was a 220% rise on the same period the year before.
In the same period, 29,444 people were made bankrupt or entered an individual voluntary arrangement (IVA), 19% more than a year ago.
Of those, 19,100 were bankruptcies while 10,344 were IVAs.
We are now seeing victims of the recession - professionals, traders, contractors and people who have been laid off - not just people who have overspent on a credit card Pat Boyden, PwC
Corporate liquidations, the end stage of the insolvency process, also rose strongly, with 4,607 firms being wound up in England & Wales in the last three months of 2008, 52% more than a year before.
Downturn
The figures from the Insolvency Service highlight the toll that has been taken on companies by the rapid lurch into recession.
"For corporate insolvencies this is almost a direct consequence of the economic downturn," said Pat Boyden, an insolvency expert at accountants PwC.
FORMS OF INSOLVENCYBankruptcy: The traditional way of escaping overwhelming debt. Ends after one year, but you are likely to lose all your assets including your house to pay something to the creditors
Individual voluntary arrangement (IVA): A deal between you and your creditors, overseen by an insolvency practitioner. Less stigma, less chance of losing your home, but involves paying some of your debts in one go or over a number of years
Debt Relief Orders: Planned for introduction in April 2009, these should allow consumers with debts of less than £15,000 and minimal assets or surplus income to write off debts without a full-blown bankruptcy
Over the whole of 2008, the number of firms that were liquidated rose by 24% to 15,535.
That amounted to one in every 150 trading companies.
"Liquidations in the fourth quarter of 2008 were dramatically up on liquidations in the same quarter of the previous year," said Alan Tomlinson of Tomlinsons, a licensed insolvency practitioner.
"It is the small and medium-sized business, which forms the backbone of the UK economy, that has suffered the most and I expect this situation to deteriorate even further in 2009," he added.
The number of other corporate insolvencies - receiverships, administrations and company voluntary arrangements - also shot up, rising by 92% to 6,276.
Personal insolvency
The number of people who were declared insolvent stood at 106,544 in England and Wales, was roughly the same as in 2007.
But within that, the number of bankruptcies reached a record level, both for a year and a quarter.
"We are now seeing victims of the recession - professionals, traders, contractors and people who have been laid off - not just people who have overspent on a credit card," said Mr Boyden.
"I think bankruptcies will go much higher in 2009," he added.
He explained that it was now more difficult to arrange an IVA as the recession meant that people in financial trouble were less likely to be able to offer their creditors some repayments.
As a result, more people on the verge of insolvency are likely to go directly into bankruptcy.
"What today's figures mean is that in 2008 we saw a staggering 350 people becoming insolvent in the UK every day," said Nick O'Reilly, president of the insolvency professionals' trade body R3. "The outlook is bleak for the next two years, when insolvency practitioners expect to see in excess of 158,000 personal insolvencies annually," he said.
http://news.bbc.co.uk/2/hi/business/7874026.stm
:wall:
What we've got here is....... failure to communicate.
Some men you just can't reach.
:wall:
What we've got here is....... failure to communicate.
Some men you just can't reach.
:wall:
0
Comments
-
Oooh, you gloom and doomer.0
-
-
IveSeenTheLight wrote: »LOL, Just a report I though some, maybe many would like to read
Yeah. Shame we already read it from someone posting the thread 25 mins before you.:D
http://forums.moneysavingexpert.com/showthread.html?t=1470913
Keep up at the back please! :rolleyes:0 -
JonnyBravo wrote: »Yeah. Shame we already read it from someone posting the thread 25 mins before you.:D
http://forums.moneysavingexpert.com/showthread.html?t=1470913
Keep up at the back please! :rolleyes:
Well, sorry not to have noticed it.
simply let it dies down instead of trying to be a smart @rse :wall:
What we've got here is....... failure to communicate.
Some men you just can't reach.
:wall:0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 354.3K Banking & Borrowing
- 254.4K Reduce Debt & Boost Income
- 455.4K Spending & Discounts
- 247.3K Work, Benefits & Business
- 604K Mortgages, Homes & Bills
- 178.4K Life & Family
- 261.5K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards