The number of people who have become bankrupt or entered into an Individual Voluntary Arrangement (IVA) in England and Wales in the last 12 months is 54,227, according to data released by the DTI. This represents the highest-ever number of personal insolvencies in a 12-month period.
Tony Hagerty, principal of Capital Link, said: “Brokers looking for new business niches to explore should look closely at the recent report from the DTI showing an annual year-on-year 37 per cent increase in personal bankruptcies.
“Apart from the growing numbers, brokers need to be aware that homeowners who are bankrupt no longer have the option of indefinite tenure of their property as there is now a three-year time limit in which creditors have the right to release monies owed to them.”
He added: “It means that trustees who are appointed by the courts to administer the bankruptcy now have no choice but to demand that bankrupt homeowners either buy back the equity in their properties or risk having the property sold over their heads.
“This is a great opportunity for mortgage brokers to provide a service to bankrupt homeowners without having to involve their client in the expense of a specialist solicitor to act for them.”
Steve Treharne, head of personal insolvency at KPMG, said: “These figures don’t paint a pretty picture and cannot be unrelated to the huge rise in mortgage repossessions and the increasingly bad debts reported by consumer lenders recently.”
