Bankruptcy not the flavour of the month?
Latest figures released by the Insolvency Service show that people crumbling under financial pressure in England and Wales has fallen to a five-year low in the first quarter of 2013.
Personal insolvencies reached a total of 25,006 in the first three months of the year, down 12.9% on the same period of 2012 and just lower than the 25,454 recorded in the previous quarter. This means that in the last 12 months only one in 419 adults became insolvent, down from 1 in 405 which was the equivalent figure last quarter.
While this is all good news, the Insolvency Service did point out that the current rate was "still elevated" compared to the annual average of about one in 1,600 adults recorded over the past 25 years. That’s four times fewer people. Between 2004 and 2010, the peak number was up to an eye-watering 566 people every day.
Of course, some quarters are celebrating this as a sign of the beginning of the end of hard times, while others are more prosaic.
Corroborating Which!’s findings, debt advice charity StepChange welcomed the news that personal debt was falling overall but warned that debt patterns were changing- instead of buying HD TVs on tick, money is being borrowed for essentials like food: “households are increasingly falling behind on priority living costs such as council tax, energy bills and rent.”
Nick O'Reilly, insolvency practitioner at chartered accountants HW Fisher & Company, warned the Guardian: " when interest rates rise there is every chance the individual insolvency rate will rise again – and potentially sharply."
Charles Turner, president of the Insolvency Practitioners Association, said: "The figures released this morning do not, in my opinion, reflect the reality of life for a great number of consumers who are undoubtedly struggling as wage growth flatlines and their household costs continue to increase."
Still, going bankrupt has become quite the in thing recently, with any number of celebrities taking the plunge in the past few years, including Westlife’s Shane Filan, Martine McCutcheon, Miquita Oliver, Kerry Katona (yawn) and Joe Swash (twice). But bankruptcy mightn’t be so bad, after all, if you move here from Ireland just before doing so you can get discharged in just 12 months, rather than 12 years, and you could even go on to be really rich, like Peter Stringfellow (who went bust in 1992) or Donald Trump, who has done OK personally despite filing for corporate bankruptcy four times.