Business Debt News – Corporate Insolvencies are on the rise again?

Recent figures published by the Insolvency Service are thought to show that despite a growing economy, rates of personal and corporate insolvencies are on the rise again.

According to reports, UK personal debt is just over £1.45 trillion (as at 31^st September), meaning that individuals still owe more than the whole UK’s GDP (i.e. the amount the UK produces in total each year). This level of debt is nothing sort of staggering considering the fragile state of the economy and the threat to job security, so often seen as the single biggest significant factor in causing personal bankruptcy.

When factoring in the record levels of public borrowing since the Second World War with £43bn a year in debt interest and it clear that this that the UK debt problem, both in terms of sovereign debt, commercial debt and personal debt is a debt mountain of Everest or K2 proportions.

Personal debt in the UK has increased by over £800 billion in the last ten years alone and the level of personal insolvencies has risen from an average of 30,000 per year to over 133,000 last year and following the Comprehensive Spending Review (CSR) to repair the public sector black hole and reduce borrowing, the country is now facing the prospect of lost consumer spending, higher taxes and the threat of more job losses in addition to the half a million already earmarked for the cull in the public sector.

As per Governments’ hopes, it is the private sector that has been tasked with leading the UK’s growth and in doing so, provide a much-needed invigoration and support to our fragile economy. However, the Comprehensive Spending Review has severely eroded sources of support and funding for the private sector, business innovation, business start-ups and supporting high growth? Mixed messages?

It seems that small business has to work smarter, harder and leaner in the current climate and in doing so, put in place, robust credit management systems, debt collection and debt recovery protocols and take the time to prevent commercial debt and bad debts by researching customers regularly with business credit reports and using debtor tracing and debt dispute resolution to find the non payers and remove barriers to collecting payments, so that the profitable businesses, whose hopes are squarely with, do not suffer at the hands of others and see the fruits of their labour.

If you are worried about reduced profits margins as a result of late payments, non payment and threat of bad debts, Corporate Credit Debt Recovery is on hand to help.