Official figures revealed today that record numbers of indebted people filed for bankruptcy in the first three months of this year.
Personal insolvencies in the UK - which include Individual Voluntary Agreements (IVAs) and bankruptcies - for Jan to Mar 2009 rose by 20% compared to the same period in 2008 to 29,744. This is the highest number recorded since records began in 1960.
Of these, the biggest proportion were bankruptcies, with a total of 19,062 people declared bankrupt, up 23.4% on the same period of 2008, according to The Insolvency Service.
These figures offer a glimpse into the reality of UK household finances, and this is expected to get even worse through the rest of year as this recession continues to takes hold and unemployment rises further. Some industry commentators have predicted that the number of bankruptcies may continue to rise for another three years.
Mark Sands, director of personal insolvency at KPMG believes the introduction of Debt Relief Orders, in conjunction with unemployment, could push the number of personal insolvencies to more than 150,000 this year.
These figures cover those who filed for bankruptcy and those who took out an IVA, a useful tool which allows debts to be frozen and paid off gradually with unaffordable debt waived, in some cases more than 50% of a persons debts can be written off.
