Tuesday 7th of April 2009
Personal insolvency levels are likely to reach a record high in 2009, it has been predicted.
According to professional services firm KPMG, the introduction of debt relief orders could bring about a significant increase in insolvencies, with a 40 per cent year-on-year increase expected.
Director of personal insolvency Mark Sands forecast a total of 150,000 insolvencies, explaining that the new measure will appeal to people struggling to pay off their debts who do not wish to be declared bankrupt.
KPMG found that the average person entering into an IVA in the final quarter of last year owed nearly £48,000 and Mr Sands noted that debt relief orders will provide another alternative.
"Many people in debt suffer stress and anxiety; resolving their debt problems without the need to go to court and at a lower cost will be a great relief," he said.
Debt relief orders came into effect yesterday (Monday April 6th), with consumer minister Gareth Thomas stating that they will help those who are in debt and on low incomes.
