Financial strain hits home as insolvency levels soar
The total number of insolvencies in Northern Ireland at the start of this year climbed to their highest rate since current records began.
There were 796 total insolvencies in the first three months of 2012, up from 787 in the last quarter of 2011 and up 15% from the same period last year.
Of the new total, there were 407 personal bankruptcy orders - down 9.8% from the first quarter of 2011, and 113 debt relief orders.
The increase in debt relief orders represents a huge jump from the 34 issued when introduced in the third quarter of 2011.
There were also 276 individual voluntary arrangements, where debtors make plans to pay off outstanding monies in installments, another rise of 14.5% compared to the same quarter in 2011.
For companies, there were 111 insolvencies, up 18.1% compared to last year, comprising 72 compulsory liquidations and 39 voluntary liquidations, both up by around 18%. Richard Ramsey, chief economist at Northern Bank, said that since the 'credit crunch' began, there have been 9,873 personal insolvencies in Northern Ireland.
"As expected, signs of financial strain are becoming increasingly evident amongst Northern Ireland households," he said.
"Whilst personal insolvencies are still on the rise in Northern Ireland, the corresponding level in England and Wales appears to have peaked and has been falling.
"Nevertheless, despite the sharper rises in Northern Ireland's insolvency figures, the incidence of personal or individual insolvency remains lower in Northern Ireland than England and Wales."
Citizens Advice Northern Ireland said that the increase in personal insolvencies by 15% in 12 months is "startling".
Pol Callaghan, head of policy with the organisation, said that the figures are reflected in the caseload of Citizens Advice.
"80% of our clients' debt comprises of mortgage debt, credit card debt, personal loans, secured loans and bank loans. If interest rates were to rise, many more people would be exposed and the problems would multiply."
Number of insolvencies in the first three months of this year