Fall in Forced Bankruptcies
Proportion of bankruptcies instigated by creditors falls
4th July 2005
The percentage of bankruptcies resulting from court action by a creditor has fallen from 28% to 16%, according to a report by accountacy firm Wilkins Kennedy.
The fall is attributed to a greater use of lucrative late payment penalties imposed on people struggling with their debts, rather than the more drastic measure of asking the courts to impose a bankruptcy.
Although these 'forced' bankruptcies are falling in number, the total number of bankruptcies is rising as more people see personal insolvency as a solution to their debt and voluntarily choose to be declared bankrupt, encouraged by recent changes that allow people to come out of bankruptcy sooner than before.
Read More: BBC Your Money
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