Phil MeekinView Profile
The quarterly insolvency statistics for Q1 (ended 31st March 2014) have been released. They reflect an overall quarter–on-quarter increase in both individual and corporate insolvencies.
A longer term view of the insolvency statistics reflect a fairly stable trend evident since 2012, with overall numbers reducing.
This encouraging news coincides with the announcement by The Office of National Statistics (ONS) that Gross Domestic Product (GDP), the total value of production in the economy, and generally accepted as a measure of its success, is 0.8%. Within this statistic, services saw growth of 0.9%, production was up 0.8% and construction grew by 0.3%. However, agriculture decreased by 0.7%.
Within the last two weeks ONS also confirmed that nationally unemployment dropped by 77,000 to 2.24m, a drop of 0.3%. The largest decline was in London and the South West, while increases were experienced in the East Midlands, the West Midlands, Yorkshire and Humber and Scotland.
Overall it paints a bright picture but there still issues gleaning a clear picture regarding individual insolvencies. This is caused by a gap in information available. Debt Management Plans (DMP) are informal arrangements with creditors. As such there is no obligation (nor indeed a register) to record the volumes. Additionally, many people are temporarily putting off formal insolvency by using the likes of Pay Day Loan companies. The provision of these loans is theoretically intended for short-term needs but many of their customers “roll-over” loans until they can no longer afford to do so – at which point they become an insolvency statistic.
If you are in financial difficulty or in a Pay-Day-Loan debt spiral, the best advice is to take professional advice from a licensed insolvency practitioner.
For free confidential advice contact Wilson Field.
Source: BBC Business News