Legal Information Centre


21 May 2009 by Mary Heaney

Growing numbers requiring a bankruptcy lawyer

New figures indicate that a growing number of individuals now require the services of a bankruptcy lawyer as the recession takes its toll.


New figures indicate that a growing number of individuals now require the services of a bankruptcy lawyer as the recession takes its toll.



Next to bankruptcies, the comparably small increase in Individual Voluntary Agreements (IVAs) suggests that for many people the situation is so severe, they are bypassing the less drastic option and going straight to the bankruptcy lawyer.



Demand for a bankruptcy lawyer set to continue




Insolvency Service figures suggest that bankruptcy lawyers are in greater demand due to the 29,774 personal insolvencies undertaken in the first quarter of 2009, representing an increase of 19% on the same time a year ago. Bankruptcy lawyers look set to continue to receive a higher volume of work as a survey of insolvency practitioners, for R3, predicts 139,000 personal insolvencies for the whole of 2009.



As an alternative to bankruptcy a bankruptcy lawyer can also assist with the new Debt Relief Order in addition to the IVA. These are designed for people with an income of less than £15,000 and could further contribute to the surge in people using a bankruptcy lawyer.



Housing slump forcing people to turn to the bankruptcy lawyer




Professional services firm, KPMG claims that over half of those now seeking help with debt are those with a mortgage - up from only 34% a year ago - suggesting that increasingly it is homeowners who are in need of a bankruptcy lawyer. A drop in house prices combined with the growing difficulty of remortgaging is making it harder for those with a home and is pushing them towards consulting a bankruptcy lawyer.



With little sign of the housing market picking up or refinancing becoming any easier, the plight of homeowners looks set to continue contributing to the already dire number of individiuals taking legal advice from bankruptcy lawyers in 2009.



Many businesses are also proving in need of a bankruptcy lawyer with 1,783 becoming insolvent in the first quarter of the year.






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