Law firm reports rise in Midlands personal bankruptcies

Mar 25 2009 by Tom Scotney, Birmingham Post

The number of people declaring themselves bankrupt in the Midlands is on the rise as the economic downturn continues to worsen, a leading Black Country law firm has claimed.

Higgs & Sons solicitor Philip Barnsley has seen a 110 per cent increase in bankruptcy instructions in 2009, and he put the worrying statistic down to an all too familiar tale.

He said: “Personal insolvency is certainly going through the roof. During the boom times, people opt for a nice holiday and other material items, they put thousands of pounds on their mortgages, only to see property prices drop.

“The prospect of going into negative equity, which was previously unheard of, is now a reality.”

One solution could be to commit to a five year repayment plan to reschedule credit card and loan repayments.

According to Mr Barnsley, in a time of such great uncertainty, many people may be unable to commit to this.

“We are expecting bankruptcies to form an increasing proportion of personal insolvencies,” he said.

“Falling house prices, the general downturn and the associated increases in unemployment are starting to have an impact.

“While consumers will fight to keep their jobs and their family homes, for those who lose both and have substantial debts there is often little reason not to declare themselves bankrupt.”

Mr Barnsley said that anyone in financial difficulties needed to take the situation in hand, rather than trying to bury their heads in the sand.