As many as 100,000 people could enter insolvency in 2006, the highest ever recorded figure in the UK, predicts KPMG.
Based on today's DTI quarterly insolvency statistics, which revealed 23,939 people went into insolvency for Q1 2006, KPMG believes the total for the year will hit six figures.
'Earlier this year, we saw a dramatic increase in the number of people calling help lines and asking the Citizens Advice Bureau and other organisations for guidance,' said Steve Treharne, head of personal insolvency at KPMG.
'The levels and availability of credit have been rising for a while. Although the most recent figures on bank lending show that this trend has reversed for the first time, there would have to be a prolonged period of reduction in the levels of credit before we see an end to these soaring levels of personal insolvencies.'
The use of the individual voluntary arrangement as an alternative for debtors to manage their debt while avoiding bankruptcy has grown, according to the latest figures.
There were 7,961 IVAs during the quarter, a 13.7% rise on the previous quarter and 142% increase on a year earlier.
Bankruptcies increased by 51% on the previous year, growing to 15,389.
Kevin Reed, Accountancy Age
