The number of people declared insolvent in England and Wales reached a record high in the third quarter of 2009, according to figures from the Insolvency Service.
There were 35,242 personal insolvencies, a increase of 28% on the same period last year, and a 6% rise on the previous quarter.
However, businesses fared better over the period, with 4,716 company liquidations, a 4.7% quarter-on-quarter fall. However, the number of businesses going bust between July and September was still 14.6% higher than the same period a year ago.
The recession has been fuelling the rise in personal insolvencies since 2007. There are a number of reasons for this. Increased unemployment has left more people unable to pay off outstanding debts, and the onset of the credit crunch meant that many banks limited the amount of cheap credit on offer. Therefore many people were unable to borrow their way out of immediate debt problems. The slow property market has also meant that people could not sell their homes and pay off outstanding debt with the equity.
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