New record set as 30,000 go bust in 2007 with more to come
More than 30,000 people went bust in England and Wales in the first three months of the year, an increase of 23.9% on the same period a year ago and a new record.
The Government Insolvency Service added that the rate of growth in insolvencies was slowing down, with the number of people going bust up only 4.7% on the month before.
The figures show that 16,842 went bankrupt in the period, while 13,233 chose an Individual Voluntary Arrangement (IVA), a deal where debtors agree with their creditors to pay off some or all of their debts over a period of time. The arrangement is overseen by an insolvency practitioner.
The last few years have seen the rise of debt management companies that provide IVAs, although there are signs that some lenders are taking a harder line with debtors and not allowing them the option.
Debt management companies have been widely blamed for encouraging people to enter IVAs to resolve their debt situations.
Lenders like High Street banks wrote off £1.4bn last year as a result of people taking out IVAs, according to accountants KPMG. Many in the industry say that this is unacceptably high and that a tougher line is necessary to solve the problem.