The number of companies facing winding up petitions in England and Wales rose by almost 9 per cent in the first three months of the year, according to official data released yesterday. The Department for Constitutional Affairs said 3,150 companies received petitions against 2,892 for the same period in 2005.
One analyst said factors in the increase could be small business failures in a fiercely competitive high street and petitions being served on companies caught undertaking value added tax fraud, he said.

Source:
Financial Times
13 May 2006

Benedict Mackenzie comments: “the government’s easing of the bankruptcy laws was intended to help entrepreneurs and small business owners, by taking away some of the stigma of bankruptcy; the government wanted the economy to benefit by encouraging entrepreneurs to take risks and establish businesses without some of the penalties that failure incurred.

The irony is that it is these very businesses that are now suffering as unprecedented numbers of individuals take advantage of easy credit and relaxed insolvency laws. The current increases in personal insolvency are completely unsustainable and without an urgent look at current credit rules we’re looking at a recipe for disaster for our businesses.