Insolvencies set to rocket as recession bites
Later today we will see evidence of the extent to which the ongoing economic downturn has impacted upon consumers around the UK with expectations that the recession will see record numbers of Individual Voluntary Arrangements (IVAs). Many insolvency experts have been predicting record debt counselling numbers and IVAs for some time and today they expect to see around 30,000 new arrangements from April to June this year.
If confirmed, these will be the worst figures since records began back in 1960 and with some forecasters suggesting the number could reach 125,000 for 2009 as a whole, this does not compare well to the 29,000 insolvencies back in 2000. The problem for the UK government and the UK banking sector is the fact that even if the economy was to recover tomorrow there are literally hundreds of thousands of UK taxpayers who have been holed below the waterline with regards to their finances and have very little option but to reorganise their debts or try to write them off.
The legacy of this latest recession in the UK would be a record number of insolvencies and more people than ever before struggling to meet their monthly debt repayments and cost of living. So while some people believe the worst is over, it could be about to get much worse for many UK consumer!
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