Bankruptcy applications rise by 12 per cent

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The Independent Online

The number of people applying for bankruptcy climbed in the first quarter of this year to 13,080, up 12 per cent on the previous three months.

The figure, released yesterday by the Ministry of Justice, is on the rise after falling during the whole of last year.

There was also a 6 per cent rise, to 4,851, in the number of creditor bankruptcy petitions during the first quarter, which are launched by people who are owed money. And 2,965 companies were facing winding-up petitions, up by 3 per cent on the previous quarter and the third successive quarterly rise.

The combined data provide the latest indication that more people and businesses are finding it harder to make ends meet this year amid soaring household bills.

Last week, first-quarter figures showed the number of people facing home repossession rose to its highest level for 16 years. And the number of people declared insolvent rose during the period to 25,264.

Howard Archer, chief UK economist of the economic and financial forecasting group Global Insight, said he was expecting to see further rises in the bankruptcy figure this year.

"It's a trend that I would expect to continue going forward," he said. "The economy was still growing in the first quarter of last year, and it was really only late last year and so far this year that the economy has started to slow markedly."

Home energy bills have risen by up to a fifth this year, while petrol prices have climbed by around 25 per cent.

Homeowners renewing their mortgages over recent months have also faced big hikes in costs after a rise in interest rates last year.