going broke - bankruptcies at record rate


Bankruptcies have reached an all-time high, according to the Department of Trade and Industry. Nearly 1,000 people a week are declared bankrupt. The personal debt mountain has reached £1 trillion for the first time, having doubled in only seven years.

Although small business failure continues to account for some of the bankruptcy figures, the rising trend is entirely due to consumer insolvency. There were 11,214 individual insolvencies in England and Wales in the second quarter of this year, a 29% increase on the same quarter in 2003.

The Citizens Advice Bureau reports that its workload has risen by nearly 50% since 1997, and that 4 out of every 5 cases it deals with relate to bad debt. It is concerned that even small rises in interest rates would result in a very steep rise in the bankruptcy rate.