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Friday May 06, 10:17
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UK bankruptcies on the rise
(by Julia Jenson)
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The number of personal bankruptcies is on the rise in England and Wales in the first quarter, hitting 10,091, according to the Department of Trade and Industry numbers. This represents a 27.9% increase from a year ago, and a 1.6% hike from the previous quarter.
The rise in personal bankruptcies contrasts with the drop in company liquidations that constituted 1.3% as compared to the previous quarter, reaching 2,900, which is also 7.4% less than in the year before. The number of total individual insolvencies hit 13,229 in England and Wales during the first three months of 2005.
A part of those are Individual Voluntary Arrangements (IVAs) which are deals between debtors and their creditors that allow them to arrive at a temporary agreement with regard to debt restructuring.
Concerns are growing about the rising amount of consumer debt that approached £1 trillion in 2004. and threatens with a rising default level. As interest rates have experienced five rate hikes since 2003, consumers may be hard pressed to repay their debt.
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