Friday, February 5, 1999 Published at 15:39 GMT
Business: The Economy
Bankruptcies jump as economy falters
Auctioneers win as bankruptcies and company wind-ups jump
The slowing economy saw a 12.6% jump in personal bankruptcies in England and Wales during the last quarter, latest figures reveal.
The Department of Trade and Industry's seasonally adjusted statistics show 6,561 people were declared insolvent, 12.6% higher than the same quarter in 1997 and 5.9% higher than in the previous quarter.
In the three months to December, 3,346 companies were declared insolvent, 6.8% up on the fourth quarter of 1997.
Scotland does not figure in the bankruptcy data because of different insolvency laws north of the border.
Meanwhile, figures released from the Lord Chancellor's department show 2,960 winding up petitions, a step towards liquidation, were issued against companies in the last quarter. This was 8% higher than the previous year. But bankruptcy is not the only cause of companies winding up.
This last quarter of 1998 saw economic growth in the UK slump to its lowest level in six years - GDP, or gross domestic product, rising just 0.2% - amid fears the economy might slide into recession in 1999.
Laws to change
Trade and Industry Secretary Stephen Byers announced earlier this week that the government would move to relax bankruptcy laws.
While the changes are not expected to reduce the number of financial failures, Mr Byers said he wanted to give entrepreneurs a quicker and easier return to business.
The figures for individual insolvencies include bankruptcy orders and individual voluntary arrangements.
A bankruptcy order is made by a court on the application of the debtor or a creditor when it decides there is no prospect of the debt being paid. Voluntary arrangements see debtors and their creditors come to an agreement over debt repayment which usually sees some of the debt repaid and the debtor made insolvent.
Companies or individuals with debts they are unable to pay when due are said to be insolvent.
But company insolvency does not automatically lead to a firm's demise. A buyer may be found to take on the running of the company.
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