Clear Start Says That Insolvency Figures Offer Hope
Released on = May 26, 2006, 9:00 am
Press Release Author = Victoria Selman
Industry = Financial
Press Release Summary = Government insolvency figures published this month demonstrate that an increasing number of people in the UK are facing major debt problems. However, Clear Start, the UK's National Consumer Debt Service says that there is some hope to be found amidst the gloom.
Press Release Body = Government insolvency figures published this month demonstrate that an increasing number of people in the UK are facing major debt problems. However, Clear Start, the UK's National Consumer Debt Service says that there is some hope to be found amidst the gloom.
In the first quarter of 2006, over 23,000 became insolvent according to official statistics. This represents an increase of 13% since the previous quarter, and a 73% increase against the corresponding quarter in 2005.
Furthermore, analysts are predicting that insolvency levels are likely to rise over the course of the year. They suggest that bankruptcies could exceed 100,000 this year, up nearly 30,000 on last year's figures.
Despite this worrying trend, Clear Start has found cause for hope in the number of IVAs that have been set up.
A third of all insolvencies this year have been accounted for by IVAs rather than bankruptcies. Moreover the number of IVAs being arranged has increased by 141% over the last twelve months.
IVAs are a government introduced alternative to bankruptcy and the fact that more and more people are setting them up shows that people are keen to avoid bankruptcy if possible. Given the far reaching consequences associated with going bankrupt, the fact that people are seeking an alternative is very encouraging.
According to Clear Start,
"Consumers are beginning to realise that bankruptcy does not offer an easy way out of debt and are turning to IVAs as a way of tackling their problems in a positive and constructive way".
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