Consumer debtors opting to be bankrupt are increasing, says government |
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Mon, 22 Aug 2005 16:05
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LONDON: Britain is facing an unprecedented increase in the number of consumer debtors resorting to bankruptcy. The department of trade and industry has published statistics which shows that during the year that ended 30 June, 2005, as many as 40,840 people declared themselves bankrupt, an increase of 28 per cent compared with the previous year.
Analysts feel the current trend is very disturbing and if it continues, the figure could double by 2008, with consumer debt mounting as a result of loans obtained and through the reckless use of credit cards.
The department, which published its annual report of Insolvency Service, its executive arm, found that more number of consumer debtors declare themselves bankrupt compared with entrepreneurs and businessmen. The number of bankruptcy cases brought forward by people whose debts are personal loans and credit card balances has risen to a record 70 per cent. There is also a marked increase in the number of people wanting to report fraudulent bankrupts to the department's hotline handling criminal complaints. Some 98 calls were received on this line during the year under review, compared with 50 last year.
The government is taking action against the bankrupts through retrieval of assets and cash. During the financial year ended 31 March 2005, some 6,500 persons agreed, or were coerced to hand over part of their income towards repayment of debts, recovering 22 million pounds. The department claims this is a 127 per cent increase over the previous year.
The department initiated 1,227 prosecutions during the year with evidence of criminal behaviour against individuals and directors of insolvent companies, leading to 234 successful prosecutions and 48 custodial sentences.
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