Bankruptcy calls on debtors rocket by nearly 20%

The number of creditors appealing to the courts to try and get their money back from people they believe are on the verge of bankruptcy shot up by 18% last quarter.

Creditors launched 5,625 bids to have individuals declared bankrupt between April and the end of June, the Ministry of Justice said last month.

The organisation publishes quarterly statistics on insolvency proceedings issued in the county courts and High Court for both bankruptcy petitions taken out against individuals and company winding up petitions in England and Wales.

The figures are a key indicator for the number of people and businesses that may go bust in the future and the latest hike shows that the tough economic conditions show no sign of improvement for creditors, individuals and businesses alike.

Further breakdowns showed that creditors had issued 2,927 company winding up petitions in the courts, an increase of 11% on the petitions in the same quarter of 2007.

13,533 people threw in the towel and lodged debtors’ bankruptcy petitions in the courts, which is about the same as in 2007, but there has been a marked shift in recent years towards cash-strapped individuals going for bankruptcy. There are also still a relatively low number of individual voluntary arrangements being established.

There were officially 24,553 individual insolvencies pushed through in England and Wales in the second quarter of 2008 according to the Insolvency Service.

This was made up of 15,297 bankruptcies, and 9,256 IVAs.

‘For bankruptcy orders there has been a pronounced shift towards debtor’s petition bankruptcies and away from creditor’s petitions in recent years. By the second quarter of 2008, 84% were made on the petition of the debtor,’ the Insolvency Service said.

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