Bankruptcies ‘hitting record levels’

Bankruptcies have hit record levels following the downturn in the economy, figures have revealed.

Newly-released data from the Insolvency Service has shown that 19,100 people were declared bankrupt in the final quarter of 2008, representing a 22 per cent rise compared to the same period in the previous year.

In addition, approximately 10,000 people took out Individual Voluntary Arrangements (IVAs) during this time, while 4,607 firms went into liquidation, showing a 52 per cent increase.

David Mond, chief executive of ClearDebt and chair of the Debt Resolution Forum, described the figures as the “tip of the iceberg”.

“Not only are there an estimated 110,000 people currently in individual voluntary arrangements, but there are probably more than 700,000 people in informal debt management plans,” he remarked.

Mr Mond added that one in 60 adults in England and Wales could be dealing with unmanageable debt, which is nearly seven times higher than the official figures.

By Jamie Price