Bankruptcy in the West Midlands has shot up by a third in the past year with experts predicting “the worst is yet to come”.
New figures from insolvency specialist Tenon Tracker reveal the number of personal insolvencies in the region totalled 3,470 in the last quarter, which includes individual voluntary arrangements (IVA), debt relief orders and people presenting their own bankruptcy petitions to the Ministry of Justice.
But this is 31 per cent higher than the same period a year ago as the credit crunch continues to bite.
Tenon Recovery analysts predict that further increases will be seen and expect to see personal insolvencies reach nearly 15,000 in the West Midlands and 140,000 nationally by the end of the year.
Andy Appleyard, director of Tenon Recovery in Birmingham, said: “Despite the rise in the number of bankruptcy petitions presented by people struggling with debts, the worst is yet to come.
“Personal insolvencies are already at record levels and will continue to rise, particularly as the effect of the debt relief order provisions are fully felt in the coming months and the impact of the economic downturn continues.
“In the West Midlands, that could mean that we see a total of 14,693 personal insolvencies over the whole of 2009.
“A staggering 90 per cent of personal insolvencies were driven by people deciding to take what many may consider to be a drastic step, rather than being forced into bankruptcy by a creditor.
“We are seeing more and more people enter bankruptcy voluntarily and fully expect this to continue, with many people seeing it as the only solution and ignoring the stigma that once existed.
“It is vital that people seek the proper professional advice so that they can evaluate all their options before making such an important decision that could have real long-term ramifications.”
Nationally, the three months leading up to June 30, 2009, saw a total of 16,265 people make themselves bankrupt – a year-on-year increase of 18 per cent .
IVAs, which also indicate a person choosing to resolve their money problems, rose dramatically by 27 per cent to 12,225.