Personal bankruptcy filings fall 9pc in July, but petitions surge this year

PUBLISHED : Saturday, 22 August, 2009, 12:00am
UPDATED : Saturday, 22 August, 2009, 12:00am

The number of personal bankruptcy filings last month totalled 1,475, down 9.1 per cent from June but still up 36 per cent from the 1,081 recorded in July last year.

According to figures released by the Official Receiver's Office, the first seven months of this year have seen 10,639 personal bankruptcy filings, two-thirds more than the 6,380 petitions received over the same period last year.

Of July's 1,475 bankruptcy petitions, 85 were submitted by creditors. The seven-month tally for petitions presented by creditors was 533, more than 8 per cent higher than the 491 petitions recorded in the same period a year ago.

The number of compulsory winding-up petitions for businesses held steady at 72, but was up from 48 a year before. The number of compulsory winding-up petitions in the first seven months of this year increased about one-third year on year to 463 from 346.

Despite the unprecedented destruction of household wealth and deterioration of global trade amid the economic downturn, bankruptcy data does not directly reflect the impact of the financial crisis because it represents a lagging indicator, usually by between six and 12 months.

Between April and June, Hong Kong's economy grew 3.3 per cent quarter on quarter and contracted by a less-than-expected 3.8 per cent year on year. For the first half of this year, gross domestic product contracted 5.8 per cent.

The latest GDP figures prompted the government to revise its full-year GDP forecast to between minus 3.5 per cent and minus 4.5 per cent from a more pessimistic minus 5.5 per cent to minus 6.5 per cent.

In the aftermath of the Asian financial crisis more than a decade ago the number of monthly personal bankruptcy petitions averaged several hundred, while during the Sars outbreak six years ago, the number was regularly above 2,000.