The growing levels of personal debt have been blamed for the increase, this coupled with the Bank of England’s decision this week to raise interest rates by a quarter of percent to 4.75% could mean the figures will continue to soar.
Although nearly two-thirds of people declared themselves bankrupt, the growth was primarily driven by a 153.2% increase in individual voluntary arrangements (IVA), an alternative to bankruptcy that allows debtors to come to an agreement with their creditors.
The growing levels have also been attributed to the large amounts of debt accrued during the previous decade following low interest rates, high employment and booming house price, the Daily Telegraph has reported. Household debt is currently at a record level of GBP1,200 billion.
KPMG has predicted that the number of personal insolvencies for the year will exceed 100,000, three times the number in 2003, blaming the rise in personal debt.
