Personal bankruptcies are rising at the fastest rate ever recorded, according to the latest research, as the recession hits home.
Accountancy firm PricewaterhouseCoopers (PwC) found that 67,428 individuals were made bankrupt last year and 39,116 entered into individual voluntary arrangements (IVAs), for a total of 106,544 personal insolvencies. While this was lower than either 2007 or 2006, the worst year on record, the underlying trend was up and bankruptcies were at their highest level ever.
Pat Boyden, personal insolvency expert at PwC, said: "IVAs were largely based on consumer debt and that had been stagnant for a number of months, suggesting perhaps that finances were stabilising in many households. There had been, however, a shift to secured lending based on the availability of second mortgages and increasing house prices.
"Bankruptcy numbers are on the increase and the year's total was a record," Mr Boyden continued, adding that some individuals will have shifted from IVAs to bankruptcies as a way of addressing their financial problems.
"In the current climate, there will be an increase in traders, company directors with personal guarantees, professionals and entrepreneurs in general seeking bankruptcy as relief from their debts." He added that the worsening trend is expected to continue throughout 2009.