The number of businesses that have gone bankrupt has risen to its highest levels since bankruptcy records began in the 1960s, according to recently released Government figures.
Based on the numbers, more than 12,000 people in England and Wales have declared bankruptcy during the three months to the end of September. This is almost a third than numbers posted during the same period of the previous year, according to the Department of Trade and Industry.
Additionally, the number of people who are taking out Individual Voluntary Arrangements (IVA) nearly doubled to 5,500. Under the IVA, interest on credit is frozen in exchange for a set amount that will be repaid every month.
According to Richard Hawes, reorganisation & recovery partner at Grant Thornton’s Cardiff office “the staggering increases in the number of people overwhelmed by financial difficulty is indisputably a direct consequence of consumer debt levels. The high street might be complaining of falling consumer spending levels but debt levels are still rising for plenty of people out there. In the past 12 months over 64,000 have become insolvent in the UK equivalent to around 1 in every 690 adults. Of these, some 3,000 are believed to be from Wales.”
According to experts the general prediction is that these bankruptcy figures are going to get worse across the UK.
Company formation and business solutions experts are saying though that entrepreneurs should not be discouraged by these figures and should still strive to achieve their dreams of setting up their own business.