Insolvencies hit record as debt crisis deepens

A record number of people went insolvent during the summer in an indication that the UK debt crisis is worsening, new figures showed today.

Statistics from the Government's Insolvency Service revealed that a total of 27,644 people went bankrupt or took out an individual voluntary arrangement between July and September.

Broken down, the figures show 15,416 people went bankrupt while 12,228 people opted for an IVA.

The combined figure was an increase on the 26,021 people who went insolvent in the previous quarter.

The combined figure represents a jump of 55.4% on the same period a year ago.

IVAs saw the largest leap, up almost 10% on the previous quarter and 118% on the corresponding quarter for 2005.

Bankruptcy figures were up 2.7% on the last quarter and almost 27% on the previous year.

The narrowing gap between bankruptcy and IVA figures is likely to raise concern that too many people are being pushed into IVAs as a result of aggressive advertising by debt management companies.

Today's announcement will also reinforce predictions that the number of people going insolvent in 2006 will exceed the 100,000 mark for the first time.