Personal Insolvencies and the Current Economic Crisis

The third quarter 2008 figures show that the individual insolvencies increased 8.8 percent over the second quarter. Additionally, the numbers are 4.6 percent higher than looking at the third quarter of 2007. The numbers clearly show that the economies of England and Wales continue to take a downward turn as does most of the world's economy.

Bankruptcies rose similarly showing an increase of over 12 percent compared to the previous quarter. Individuals are calling for some sort of help to deliver them from the current economic crisis. The England and Wales economies cannot continue the recession atmosphere. The Bank of England is being called upon to put a stop to the major economic slowdown. It is expected that the interest rates will be cut by the Monetary Policy Committee to reduce the cost of borrowing. As long as they continue to delay doing so, the further the economy continues to deteriorate.

The number of bankruptcy orders involving trading debts or self employed bankruptcies decreased from 70 percent to 11.2 percent. However, the classification has changed from how it was noted in the 1990's. The problem will continue to deteriorate overall because self employed individuals rely on consumer spending to continue to be successful. It is expected that consumer spending will sharply fall. This will create an overall poor financial outlook for small businesses.

The current economy feels worse than any previous recessions. It doesn't seem to be one part of the economy that is outperforming any others. The housing market is not out of the woods; it continues to decrease due to falling housing sales and the reduced equity values. The labour markets are on the radar as well. Fuel costs are also increasing. If you have to commute to a job, you have to set aside even more money per week and month to get you there. Most people these days have to plan where they go and combine trips to save gas because of the rising costs in fuel. Because of the longer hours that most people are working, carpooling is not always a good option.

Companies are downsizing, rightsizing, and filing for bankruptcy. There is no such thing as job security. If you were downsized, you may have taken a job that paid substantially less than what you were paid when you took on the debt load that you have currently. And in the worse case scenario, you may not have any job at all. The unemployment rate continues to get worse, and it does not account for those who have exhausted their unemployment and continue to be unable to find work. If you are unable to make up that money in a part-time or another full-time job because of family constraints, you will continue to get further behind. If you have been laid off, do not blame yourself. A change in income is one of the factors in a bankruptcy case.

The temporary tax cut will not be enough to increase the weak employment market.

All eyes are on the interest rates. All experts know that the economy is cyclical in nature however our current economy is proving most of the previous cycles wrong.

Data source: The Insolvency Service

Useful links: IVA | Debt Help | Debt Soluations