Friday, Nov 03, 2006

Insolvency figures show huge growth year on year

Firstrung: Insolvencies up 55.4 percent in a year - The Insolvency Service

There were 27,644 individual insolvencies in England and Wales in the third quarter of 2006 on a seasonally adjusted basis. This was an increase of 5.7% on the previous quarter and an increase of 55.4% on the same period a year ago. This was made up of 15,416 bankruptcies, an increase of 2.7% on the previous quarter and an increase of 26.6% on the corresponding quarter of the previous year, and 12,228 Individual Voluntary Arrangements (IVAs), an increase of 9.8% on the previous quarter and an increase of 117.9% on the corresponding quarter of the previous year.

Posted by converted lurker @ 10:27 AM (371 views)
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17 Comments

1. Eddie_lomax said...

And yet the politicians are silent, just like they have been for the past years of rising debts. I do wonder though if pressure will be brought to bear on the BOE to defer the interest rate rise ?

And gas prices look to be rising, this should be enjoyable to watch, not so enjoyable to experience.

Friday, November 3, 2006 11:07AM Report Comment
 

2. sovietuk said...

Misery on a massive scale. Who's responsible for this? Just the borrowers or should the crooks running the show shoulder some of the blame? The mother of all recssions is on its way.

Friday, November 3, 2006 11:29AM Report Comment
 

3. denzil said...

I don't think 55% YoY is actually going to have much ripple effect into house prices and is surprisingly low. Considering the process of IVA's is quite well known I'm surprised it's as low as 55%. Several hundred percent growth YoY would probably mean trouble is with us.

Friday, November 3, 2006 11:54AM Report Comment
 

4. george monsoon said...

What can I say, the crooks who lent out the money to unfortunate individuals, are now starting to demand the money back, because lending practices are becoming unsustainable. I think people forget that the banks lend money, to make money. Especially the under 25's who have been born into a society that promotes personal dept.

Friday, November 3, 2006 12:54PM Report Comment
 

5. kpjcomp said...

Denzil,,

Those numbers are a huge increase!! Remember that's YoY..
If you look at the graph 8000 appears to be the norm.. about 88 people per day.
It's now more like 303 per day.
Or put another way 345% increase compared to normal.

Now what would be intresting is to see the stats for 88,89,90,91.. but the ONS only appears to go back to 92 when there were about 100 per day.
Do you think the goverment don't show the graph going back to 89, just in case people see the trend..

Friday, November 3, 2006 01:19PM Report Comment
 

6. sold 2 rent 1 said...

The problem with insolvency figures is that they are as much to do with the change in the law as they are to do with economics

Friday, November 3, 2006 01:42PM Report Comment
 

7. inbreda said...

Yes - the banks are crooks - what's new?

As a holder of shares in Debt Free Direct as well as DebtMatters, what I'm more interested in is whether the banks genuinely do have enough political clout to get the government to change the laws on IVAs.

Now THAT would be a clear case of the banks being crooks.

Friday, November 3, 2006 01:57PM Report Comment
 

8. monty said...

The increase in IVAs has to fall on the shoulders of the debt consolidation industry. The banks pale by comparison when it comes to slick marketing. The misery will only become apparent some years down the line when the IVAers find out that there is a huge black oil slick lining their credit record and they are truly shafted. The banks are no angels either but they seem quite capable of balancing risk and no doubt will come out the other side of this insolvency storm with bumper profits to boot.

Friday, November 3, 2006 02:24PM Report Comment
 

9. denzil said...

kpjcomp said:
>>Those numbers are a huge increase!! Remember that's YoY..

The thing is IVA's are becoming really fashionable and you only have to go to any party or pub and talk has shifted from BTL to IVA's. Many people are wise to IVA's and their potential as get out of jail free cards.
I genuinely don't feel the current rise is anywhere near high enough to have any impact on HPC/HPI.

Friday, November 3, 2006 02:30PM Report Comment
 

10. little professor said...

People don't see IVAs as a problem these days - even if you have a "huge black oil slick" on your credit record you will still find some shady bank or loan company willing to throw money at you.

The problems will come when credit starts tightening - these people will be the first to feel their nuts in the wringer.

Friday, November 3, 2006 02:56PM Report Comment
 

11. p. o. o. r said...

With banks like Abbey introducing this 5 times salary mortgage offer it is going to be very interesting to see the developments - Short term (Next 3 - 6 months) will see an increase in housing market at bottom end - It will be talk about how well the market is doing. Then there is going to be trouble - as there is no question many people will not be able to afford these mortgages so my prediction is that in another 12 months from now we could easily see the number of insolvancies doubling. I wonder what excuses the banks will use, and how much they will have to put to one side for bad debt. I am thinking that investing in debt companies might be a good idea..

Friday, November 3, 2006 03:06PM Report Comment
 

12. monty said...

That's exactly what I'm saying LP. People don't see a problem with an IVA today and credit is cheap and easy. The problem lies some years down the road when they try to get their first mortgage and suddenly find that the lenders see an IVA and bankruptcy as much the same thing. Brace yourself then for the deluge of "IVA mis-selling" scandals.

Friday, November 3, 2006 03:13PM Report Comment
 

13. Rubberneck said...

How exactly does one invest in a debt consolidation/IVA provision company?

Friday, November 3, 2006 03:26PM Report Comment
 

14. indiablue19 said...

Remember where the tobacco companies sat when enough people had died of cancers that "could have been prevented with property warning." This could be interesting -- potential perhaps for a gigantic class action lawsuit [maybe even in an EU court?] against irresponsible lending institutions or a government who didn't bother to regulate them????

Friday, November 3, 2006 10:21PM Report Comment
 

15. indiablue19 said...

Uh oh, make that "could have been prevented with PROPER warning," trying to be true to the blog theme, but spelling is important!

Saturday, November 4, 2006 12:11PM Report Comment
 

16. paolo88888 said...

indiablue19,

Are you suggesting that we should get one of these mortgages to cash-in on the potential lawsuit bonanza? I hope not, but I say this because I get very annoyed with people who get compensation for endowment policies which do not pay off their mortgages. I always took out repayment mortgages for that reason, and get very annoyed when I lose having made the "right" call. The MPC has made statements about housing being overvalued and anyone with internet access can read this site, so I think you have no excuse if you buy a house now and there is HPC.

Saturday, November 4, 2006 10:58PM Report Comment
 

17. indiablue19 said...

paolo....

Nope, not interested in joining this hypothetical lawsuit as I MUST have better fish to fry than that. But I am suggesting that the "damages" motivated echelon of society, including ever-asute members of the legal profession, could have a field day poking holes through the current irresponsible lending process and the economic "victims" it is creating. Lawyers can just park their Jags outside the debt advice agencies and flag down their clients at the door. Who better to attack for some juicy compensation than the cash-rich, deep pocket banking system who has gathered this flock of lemmings under false pretenses, and who is scooping up billions in profits as we speak. ?????

Sunday, November 5, 2006 12:16AM Report Comment
 

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