Bankruptcies reach record levels

The number of people being declared bankrupt in England and Wales has hit a new record, according to the government's Insolvency Service. In the first three months of the year there were a record 19,062 bankruptcies and 10,713 individual voluntary arrangements (IVAs).

The number of companies going bust in England and Wales fell back in the first three months of the year.However the figures were still 54% higher than a year ago.

The insolvency specialists Begbies Traynor predicted that personal insolvencies might rise above 125,000 this year. "This reflects both the stresses of high levels of personal debt and rising unemployment and a record number of entrepreneurs going bankrupt on the back of their business's failure," said the firm's chairman Ric Traynor.

Personal insolvency

In the first quarter of 2009 there were 29,774 personal insolvencies in total, 1.6% up on the previous quarter and 19% up on a year ago. The annual number of people being declared insolvent was steady during 2006, 2007 and 2008. But the figures started to rise in the middle of last year, reflecting the plunge of the economy into recession. Mark Sands, a personal insolvency expert at KPMG, said the numbers would grow, especially when Debt Relief Orders - for people with debts of below L15,000 - were taken into account in the future. "What we are seeing is actually record levels of personal insolvency," Mr Sands said.