February 6, 2009

Bankruptcies skyrocket in Britain

Companies entering into administration in Britain rose 124 percent in the fourth quarter of 2008, the Insolvency Service said.

The service said 2,018 companies entered into administration during the quarter, up from 575 in the fourth quarter of 2007, The Times of London reported Friday. The number includes one company that managed 729 service businesses, putting a more realistic figure of collapsed companies at 1,289.

Although there are technical differences, entering administration is the equivalent of filing for bankruptcy in the United States.

These numbers are bad, but they are going to get progressively worse as business and consumer confidence continues to fall, said Malcolm Shierson, at Grant Thornton, a reorganization company.

Individuals are also struggling. In Britain, 19,100 people filed for bankruptcy in the last three months of the year, a 22 percent increase from the fourth quarter of 2007.

For the year, 67,428 people filed for bankruptcy in Britain in 2008, the highest number since bankruptcies were first tracked in 1960, the newspaper said.