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Loans & Credit

Record numbers go bankrupt

A record number of people in England and Wales asked to go bankrupt during 2007, Government figures showed today.

A total of 53,114 people petitioned to go bankrupt themselves after being unable to keep up with their debts, as opposed to having their creditors call for them to go bankrupt, according to the Ministry of Justice.

The figure was just under 1 per cent higher than the number of people who asked to go bankrupt in 2006, but it was a 44 per cent jump on the total for 2005 and nearly double 2004's level.

But there was a dip in bankruptcy petitions from debtors during the final quarter of the year, with just 11,703 people asking to go bankrupt in the three months, the lowest level since 2005 and 10 per cent down on the same period of 2006.

At the same time the number of creditors who petitioned for people to be made bankrupt also fell during the final quarter to 4,614, 11 per cent fewer than during the last three months of 2006 and a level last seen in 2004.

During the whole of 2007 there were 20,156 creditors bankruptcy petitions lodged with courts in England and Wales, meaning that nearly three-quarters of people asking to go bankrupt were initiating the process themselves.

Today's figures come a fortnight after the Insolvency Service released data showing that the number of people actually declared insolvent fell for the first time in nine years during 2007.

Like the Insolvency Service figures, the dip in the number of people petitioning for bankruptcy during the final quarter is likely to represent the lull before the storm, with bankruptcy petitions expected to begin climbing again this year.

Wales saw the biggest jump in the number of people declaring themselves bankrupt, with the figure rising by 8 per cent during 2007, followed by the North West, where it rose by 6 per cent.

But at the other end of the scale there was a 9 per cent drop in bankruptcy petitions from debtors in the South West during 2007 compared with 2006.

The Ministry of Justice figures also showed that there were 11,791 company winding up petitions during 2007, down from 12,103 in 2006.

The level of petitions increased slightly during the final quarter to 2,962, although they were still 10 per cent down on the last three months of 2006.