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Record levels of bankruptcies as middle class and famous are hit
Jonathan Prynn, Consumer Business Editor06.11.09
The number of borrowers collapsing under the weight of their debts has soared to an all-time high.
A record 35,242 personal insolvencies were registered in the third quarter of the year — about 3,000 in London — the most since records began in 1960.
The total, up 28 per cent in a year, has been fuelled by a sharp rise in middle class families unable to cope with their finances, according to debt advisers.
Famous figures who have filed for bankruptcy in the recession include former England football star John Barnes and former Atomic Kittens singer Kerry Katona.
The tally for 2009 is now certain to pass last year's figure of 106,544 and could hit 130,000, with some experts predicting a further rise next year and in 2011.
Many of those forced into bankruptcy or the other forms of personal insolvency have lost their jobs in the recession and been unable to meet mortgage or other loans payments. The rising cost of everyday expenses such as gas and electricity bills has also contributed.
Britons built up about £1.4 trillion of debt during the long credit binge that ended in 2007 and many are now struggling to meet payments. The figures dwarf anything seen in the last recession, when the quarterly figures peaked at 10,942 in the winter of 1993.
Alan Tomlinson, partner at insolvency practitioners Tomlinsons, said: “The shake-out from the credit boom continues apace with more and more people being declared insolvent and there are no signs that this is going to change in the foreseeable future. Several times a week we are approached by people who are in a terrible way financially.”
More than 4,500 of the insolvencies were through Debt Relief Orders, a cheaper option introduced in April for people owing less than £15,000 and who have less than £50 a month to repay debt after living expenses.
A spokeswoman for Citizens Advice said: “We are seeing all sorts of different people. It was the most vulnerable who got hit first but now we are also seeing middle class families.”
Reader views (5)
Its fine the working classes being in debt and unemployed, and its also fine to a lesser degree the middle classes now getting a dose of it all; just as long as the upper classes are still getting fatter and richer than ever.
Lets be honest here; most of the rich have very large homes with multiple bedrooms and bathrooms, many even have swimming pools and tennis courts to heat and light etc; and as the utility companies need to charge for their services, in order to make larger profits; they suffer more than the poor or middle classes; it’s not always good or even easy, being millionaires and billionaires in the UK today etc.
The poor and the middle classes should stop being envious of the Elite in the UK, they create our wealth, and will lead us out of recession once again, you can’t blame everything on the wealthy and powerful; because they can’t change anything, least of all themselves.
And if you believe all that, you are more stupid than I am…….LOL.
As Norman Tebbit once said; get on your bikes, and become millionaires if you ain't happy with your job.
- Mickinlondon, london
This is the real story we should all be concentrating upon - Brown's debt mountain which is sinking us all. It beggars belief that so many people are running with the false hare of the European question. We need to resolve our indebtedness and stick Brown where he belongs - in the electoral dustbin. Leaving aside QE, Brown is still increasing spending and debt despite the horrific state our finances are in.
- James Elliott, Eastbourne UK
What is so surprising about this? The average Bankruptcy is seven months to discharge. Run up thousands of pounds worth of debts, file for Bankruptcy and emerge six to twleve months later with a clean sheet. No brainer.
- Bj, East London
This is all the fault of the greedy bankers. These poor people drowning under debt are victims and should be compensated by the bankers who caused their problems. And the abusive bankers who are now wven keeping government money for themselves should be forced to lend money to these people so that they and their deserving working families can get through the recession and continue spending to support the great British economy.
- Alan Parker, hong kong
Ah, Gordon Browns debt mountain. He was awarned about bubbles and excess lending by Eddie George in 2003, but Gordy had "abolished boom and bust" so didnt listen.
This will run a few more years yet, with a wonderful trickle effect for the wider economy.
- Dave Davies, Basingstoke, Hants
