Once wealthy, but now hit by bankruptcy

Personal bankruptcies rose to a five-year high last month - and an increasing number of those were wealthy people battered by the global financial crisis.

Figures released by the Official Receiver's Office showed 1,872 personal bankruptcy petitions were filed last month, up almost 25 per cent from February. It was the highest since July 2003, when 1,899 bankruptcy petitions were filed in the wake of the outbreak of severe acute respiratory syndrome. The number of petitions for the first quarter of this year was 4,638, up more than 80 per cent on the same period last year.

Tsui Pui-hung, a partner at the law firm Shea and Company, said that an increasing number of the bankruptcy cases that his firm recently handled involved better-off people.

'In the past, many of the clients were lower-income workers. They got into trouble because they could not repay credit card payments. But recently, some of our clients owed their creditors as much as HK$10 million. There was a case of a debtor who owed HK$100 million,' Mr Tsui said.

'Many of these debtors are businessmen who had invested heavily in the financial markets. When the market suddenly turned bad, they found themselves in a difficult financial situation and had to go bankrupt.'

Tse Lin-chung, a partner at the law firm Yip, Tse and Tang, said: 'The economy is still worsening. The March figure is very high. But it is still too early to say if the worst is over.'