Men more likely to go bankrupt over a business

Men are much more likely than women to go bankrupt because their sole trader business fails, a report has found.

In fact, business failure-related bankruptcies accounted for roughly one in three of men’s bankruptcies in 2014, but only one in seven women’s bankruptcies, said report author R3, an insolvency body.

Losing market share, failing to manage the business properly or a failing to expand are among the triggers of business-related bankruptcy that men are more likely to experience.

For example, the report cites 1,240 men who went bankrupt in 2014 due to their business losing market share, compared with 445 women who went bankrupt for the same reason.

Men are also more likely than women to go bankrupt due to a financial issue with their business, such as a bad debt or a knock-on effect from the failure of another venture.

These numerous bankruptcy triggers (in a male-run business) reflect R3’s finding that male bankruptcies (overall) are more likely to be caused by a “wider number of factors” than women’s.

Evidencing its claim, the body said the top three causes of men’s bankruptcies accounted for only a third of all male bankruptcies, whereas the top three causes of women’s bankruptcies (relationship breakdown, living beyond means and a significant reduction in household income) accounted for over half the total.

Despite describing the differences between the genders when it comes to the cause of bankruptcy as “stark,” R3’s Andrew Tate pointed out that the report's figures reflected the fact that men were still more likely to own a business.

While that business may be structured as a limited company, it is the sole trader model of business that holds the owner personally liable (or jointly with any partners) for its debts, which can lead to the owner going bankrupt.


 

10th July 2016

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