Female bankrupts soar due to recession
An equal number of men and women are now being declared bankrupt after the number of female insolvencies has jumped by 7% in the past four years.
Women now account for half of the 420 people who become insolvent every working day, according to RSM Tenon figures.
Women under 35 have been hit the hardest by the recession, as they now make up 28% of all insolvencies, in contrast to the 18% of men in the same age bracket.
Mark Sands, RSM Tenon's head of personal insolvency, says: "This could be the result of a number of things including the effects of the public sector cuts who employ a large number of female staff and an increase in women obtaining credit earlier in their careers only to see their debt levels spiralling out of control."
Total personal insolvencies are at their lowest since 2008 - there were just 113,000 last year, and the figure is expected to fall to around 100,000 for 2012.
"As soon as we start to see an increase in the base rate I am sure personal insolvencies are likely to follow but in the meantime personal insolvencies will be benign," adds Sands.
Figures also show that the numbers debt relief orders - the insolvency solution for low levels of debt - have increased by 7% since the start of 2011.
Generally speaking, insolvency is to businesses what bankruptcy is to individuals. A company is insolvent if the value of its assets is less than the amount of its liabilities, or it is unable to pay its liabilities (loan payments) as they fall due. It’s an offence for an insolvent company to keep trading, so the main options available to an insolvent company are: voluntary liquidation, compulsory liquidation, administration or a company voluntary arrangement.
Also referred to as the bank rate or the minimum lending rate, the Bank of England base rate is the lowest rate the Bank uses to discount bills of exchange. This affects consumers as it is used by mainstream lenders and banks as the basis for calculating interest rates on mortgages, loans and savings.