Britain sees hike in personal bankruptcies

LONDON, May 1 (UPI) -- Personal bankruptcies in Britain rose to 29,774 during the first quarter this year, 19 percent higher than the same period last year, a report showed Friday.

Experts also forecast personal insolvencies could keep rising for another three years as the recession unfolds, The Daily Telegraph reported Friday.

Meanwhile Insolvency Service reported the number of companies that collapsed rose by 56 percent year-over-year to 4,941 in the three months.

"With unemployment currently at the 2 million mark and the collapse of many owner-managed businesses, the level of personal insolvency is likely to rise in the coming months," Mike Gerrard of the Grant Thornton accounting firm said.

Particularly vulnerable are people who "had to stretch themselves to the absolute limit" to get into the housing market, Howard Archer, an economist at Global Insight, told the British publication.

"Obviously the more that house prices fall, the more people will be trapped with negative equity," Archer said. "And it is those people with the weakest credit ratings that are being hardest hit by still very tight lending conditions."