RECORD INSOLVENCIES FUELLED BY SPIRALLING PERSONAL DEBT

5.09.19pm BST (GMT +0100) Mon 8th Aug 2005

More people are going broke than at any time since records began in 1960. Bankruptcies have soared to an all-time high of 40,840 in the past year - a 28 per cent rise on the previous year and nearly 112 a day. Warning the crisis could worsen, debt expert Steve Treharne of KPMG accountants said: "We have a major consumer debt problem. If current trends continue, we could see annual bankruptcy rates at double the present level before there is any improvement. People have too many credit cards and there's too much debt in the system." Individual bankruptcies surged 36 per cent to 12,338 in the last three months, official figures showed yesterday. In addition 3,229 firms went bust, a 45 per cent jump.

Simon Davey, a Liberal Democrat caseworker and local campaigner commented

"It is worrying that despite low interest rates and low unemployment there are still such a high number of both individual and company insolvencies. Personal debt has spiralled out of control over recent years and the problem is still growing. The Government needs to stop being complacent and take action to tackle the problem of personal debt by clamping down on unsolicited mailing, reckless lending and misleading advertising."