Insolvencies soar by 66% (From Hampshire Chronicle)

Insolvencies soar by 66%

12:10pm Friday 21st August 2009

• Print
• Email
• Share
• Comments(0)

PERSONAL insolvencies have soared in Winchester in the last year.

Statistics released by the Ministry of Justice uncovered a hike of 66 per cent in the 12 months to June, compared with the same period last year.

A total of 118 people declared themselves bankrupt — evidence that the recession is beginning to bite in the city.

Jenny Meadows, manager of Winchester’s Citizens’ Advice Bureau (CAB), warned the problem was likely to get worse.

She said in the short-term those out of work keep up with mortgage repayments through insurance schemes, savings or by borrowing from family members.

She said: “They will actually run out of money, and if they have not got future employment, personal insolvencies are going to get worse, not better, in the medium term.”

Mrs Meadows said the stigma attached to becoming bankrupt was now less of an issue because for many it is their only option.

She said: “The situation in Winchester was if people became unemployed they’d find a job quickly, but that’s not the case anymore.”

Winchester’s figures compare poorly with the rest of Hampshire, where 1,660 declared themselves bankrupt — a rise of 19 per cent.

The wave of sad financial tidings was actually less than that recorded elsewhere in the country, which saw an average increase of 22 per cent.

Jim Pretty, a partner at Eastleigh-based insolvency practitioners Atherton Bailey, said the drop in property values was only just beginning to be felt in affluent areas such as Winchester.

He said: “Those individuals that had equity in their property had been hanging on in the hope that prices would come back up to save them.

“But they now realise that the recovery in property prices is going to be a long haul rather than a quick rebound, and that they cannot rely on the recovery in property prices to save them.

“A number of Winchester residents worked in the City of London and their redundancy packages may have helped them avoid the initial downturn in the economy.

“But as time has gone on and they haven’t found new employment, then their redundancy funds will have been used up servicing debts that they can now no longer afford.”

In Southampton the rise was more modest, with 651 people successfully petitioned the court to bankrupt themselves — a rise of 14 per cent.

In Portsmouth, the numbers jumped by nearly a quarter to 688, while on the Isle of Wight they remained relatively constant with a rise of just two per cent.

Mrs Meadows, who revealed in June that debt enquiries at Winchester’s CAB had risen by 38 per cent in 2008/09, said those with financial problems should seek advice early.

For more information visit www.adviceguide.org.uk.

• Print
• Email
• Share
• Comments(0)