Unsurprisingly, given the state of the economy, the number of bankruptcies has rocketed. The Insolvency Service report that corporate insolvencies rose to 4,941 in Q1 of 2009, a rise 56% over the same period last year, and rise of 7% on Q4 of 2008.
Individual insolvencies rose by 19% to 29,774, this is the highest level since records began in 1960.
Personal bankruptcies rose by 23% per cent to 19,062, and individual voluntary arrangements (IVA's) rose by almost 12% to 10,713.
Unfortunately, things are likely to get worse before any improvement in the economy (as and when that happens) kicks in.
Showing posts with label iva. Show all posts
Showing posts with label iva. Show all posts
Friday, May 01, 2009
Monday, August 06, 2007
Banks Get Tough
Britain's ever popular and "respected" banks are starting to "get heavy" with those in debt.
The number of home repossessions and county court judgements are rising, while personal insolvencies (IVA's) are dropping. This is a sign that the banks are growing weary of the IVA culture that has sprung up in the UK over the past year or so.
The Council of Mortgage Lenders (CML) reported that the number of home repossessions across the UK has risen to its highest level in eight years, in the first 6 months of 2007. Approximately 14,000 homes were repossessed by banks and building societies in the period Jan-June 2007, this represents a rise of 30% on the same period last year.
CML attributes this to the increase in sub prime lending, ie loans made to people who would normally be considered to be a db credit risk.
Michael Coogan, CML director general, said:
"The greater risks inherent in sub-prime lending are resulting in significantly higher levels of repossession in that part of the market compared to mainstream experience."
It is not just the mortgage market that is feeling a credit squeeze, but also the unsecured loan market as well. There has been a fall in the number of people being allowed to reduce their borrowing by entering into an Individual Voluntary Arrangement (IVA).
The Insolvency Service has reported a 15% reduction in the number of IVAs issued in the second quarter of 2007 to 10,698.
The Registry Trust has reported that the number of county court judgments (CCJs) issued to consumers in England and Wales increased by 5% in the first half of 2007 to more than 420,000.
The credit squeeze will get worse over the coming months. Those that are thinking of increasing their debt burden should make sure that they fully understand what they are committing themselves to.
The number of home repossessions and county court judgements are rising, while personal insolvencies (IVA's) are dropping. This is a sign that the banks are growing weary of the IVA culture that has sprung up in the UK over the past year or so.
The Council of Mortgage Lenders (CML) reported that the number of home repossessions across the UK has risen to its highest level in eight years, in the first 6 months of 2007. Approximately 14,000 homes were repossessed by banks and building societies in the period Jan-June 2007, this represents a rise of 30% on the same period last year.
CML attributes this to the increase in sub prime lending, ie loans made to people who would normally be considered to be a db credit risk.
Michael Coogan, CML director general, said:
"The greater risks inherent in sub-prime lending are resulting in significantly higher levels of repossession in that part of the market compared to mainstream experience."
It is not just the mortgage market that is feeling a credit squeeze, but also the unsecured loan market as well. There has been a fall in the number of people being allowed to reduce their borrowing by entering into an Individual Voluntary Arrangement (IVA).
The Insolvency Service has reported a 15% reduction in the number of IVAs issued in the second quarter of 2007 to 10,698.
The Registry Trust has reported that the number of county court judgments (CCJs) issued to consumers in England and Wales increased by 5% in the first half of 2007 to more than 420,000.
The credit squeeze will get worse over the coming months. Those that are thinking of increasing their debt burden should make sure that they fully understand what they are committing themselves to.
Tuesday, January 09, 2007
Self Appointed IVA Watchdog Under Fire
An organisation that claims to be the regulator for the "cowboy-plagued" IVA industry, has itself come under fire from the Department of Trade and Industry (DTI).
An IVA (individual Voluntary Arrangement) is being touted by the cowboys in the financial services industry as a panacea for people with excessive debts.
An IVA is a legal contract between debtor and creditor, supervised by a Licensed Insolvency Practitioner (who takes a fee), the purpose of which is to reach a compromise between debtor and creditor and avoid the consequences of bankruptcy.
The DTI is more than a little aggrieved that IVA.com, which launched its website earlier this week, claims to be a regulator and was displaying the logo of the DTI's official Insolvency Service without permission.
Unfortunately for IVA.com the DTI claims that it knows nothing about the organisation, and has requested that the logo be removed.
Evidently the British Bankers' Association (BBA) also looked into the company, as the BBA logo was used without permission.
Hardly a promising start for a "regulator"!
An IVA (individual Voluntary Arrangement) is being touted by the cowboys in the financial services industry as a panacea for people with excessive debts.
An IVA is a legal contract between debtor and creditor, supervised by a Licensed Insolvency Practitioner (who takes a fee), the purpose of which is to reach a compromise between debtor and creditor and avoid the consequences of bankruptcy.
The DTI is more than a little aggrieved that IVA.com, which launched its website earlier this week, claims to be a regulator and was displaying the logo of the DTI's official Insolvency Service without permission.
Unfortunately for IVA.com the DTI claims that it knows nothing about the organisation, and has requested that the logo be removed.
Evidently the British Bankers' Association (BBA) also looked into the company, as the BBA logo was used without permission.
Hardly a promising start for a "regulator"!
Tuesday, November 21, 2006
Lessons in Finance
George Osborne, the Shadow Chancellor, is calling for children to be given lessons in finance and money management.
The lessons would include life relevant areas such as, how to calculate rates of interest and how to balance a budget to prevent levels of debt from worsening.
The lessons are, in the opinion of the Conservatives, necessary in order to address the spiraling level of indebtedness of the British public.
Mr Osborne presented his suggestion during the third "debt summit" held by the Tories this year. The summit was attended by leading figures from the financial services industry, consumer protection bodies and charities.
The Tories have quite a challenge ahead of them, whilst it is true that people should take responsibility for their own finances, they are faced with the aggressive marketing of all manner of financial products. It is not unreasonable to call on the financial services industry, which has sullied its reputation over the last few years (with its appalling response to the endowment mortgage crisis), to act in a responsible manner when lending money.
Citizens Advice has agreed to work with the Tories to help people achieve a better grasp of financial matters.
The Conservatives have also asked the Advertising Standards Authority to investigate whether some companies, encouraging people struggling with debts to sign IVAs, were in breach of its advertising code.
Mr Osborne said:
"Like many consumer groups and banks, I am concerned that people may be being encouraged by unscrupulous IVA companies to commit to IVAs, even where this may not be the right course of action.
And I'm also concerned that companies aren't always properly informing their customers about the fees they charge for arranging an IVA, or about the adverse effects of IVAs on credit ratings."
The trouble that all the politicians face, whatever party they belong to, is that Britain relies on the debt burdened consumer to fuel the economy. Unnerve the consumer too much, and you have a recession. It is a delicate balancing act.
The lessons would include life relevant areas such as, how to calculate rates of interest and how to balance a budget to prevent levels of debt from worsening.
The lessons are, in the opinion of the Conservatives, necessary in order to address the spiraling level of indebtedness of the British public.
Mr Osborne presented his suggestion during the third "debt summit" held by the Tories this year. The summit was attended by leading figures from the financial services industry, consumer protection bodies and charities.
The Tories have quite a challenge ahead of them, whilst it is true that people should take responsibility for their own finances, they are faced with the aggressive marketing of all manner of financial products. It is not unreasonable to call on the financial services industry, which has sullied its reputation over the last few years (with its appalling response to the endowment mortgage crisis), to act in a responsible manner when lending money.
Citizens Advice has agreed to work with the Tories to help people achieve a better grasp of financial matters.
The Conservatives have also asked the Advertising Standards Authority to investigate whether some companies, encouraging people struggling with debts to sign IVAs, were in breach of its advertising code.
Mr Osborne said:
"Like many consumer groups and banks, I am concerned that people may be being encouraged by unscrupulous IVA companies to commit to IVAs, even where this may not be the right course of action.
And I'm also concerned that companies aren't always properly informing their customers about the fees they charge for arranging an IVA, or about the adverse effects of IVAs on credit ratings."
The trouble that all the politicians face, whatever party they belong to, is that Britain relies on the debt burdened consumer to fuel the economy. Unnerve the consumer too much, and you have a recession. It is a delicate balancing act.
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