Rate of bankruptcies increasing

Figures showing increases in the number company winding up and bankruptcy petitions sought may be only the beginning of a pattern of acceleration.

The Ministry of Justice figures show a 13% increase in the number of company winding up petitions, an increase of 10% on creditors’ petitions and a 7% increase in the number of debtors’ petitions, something experts say is further evidence of the probable progression of the UK economy towards recession.

Chris Bryden, barrister at 2 Gray’s Inn Square says that it is likely that such increases in petitions are likely to be only the beginning of an increasing trend. “The increase in people petitioning for their own bankruptcy continues to grow at an alarming rate, and whilst the acceleration between Q2 and Q3 appears to be slowing, the ongoing upward trend reverses the decrease in petitions in 2007.”

Bryden believes that the trend will increase and that the reduction in the rate of acceleration will prove temporary. “The real increases are likely to come in 2009, which will provide clear evidence of an economic downturn and will provide a more reliable forecast as to the real effects of the current pressures and how long that downturn is likely to last.”