Bankruptcy levels bust records

Filings for personal bankruptcy increased to record levels during the final months of 2005, rising 57 per cent compared to the same period of the year before.

But even this figure was dwarfed by a new alternative to bankruptcy, Individual Voluntary Agreements, or IVAs, which rose by a staggering 117 per cent on 2004.

There were a total of 20,461 individual insolvencies in the last quarter of 2004.

The figures showed that "many people have borrowed to their limits", said Howard Archer of Global Insight.

Other figures released today have added to the gloomy picture. The Council of Mortgage Lenders (CML) said the numbers of repossessed properties increased 70 per cent in 2005, although this figure remains low by historic standards.

"As expected, arrears and possessions are increasing from what was a phenomenally low trough. Although the scale of increase is notable, the absolute numbers are still extremely small, and set to remain so," said CML director Michael Coogan.

"Now would be a good time for borrowers to review their financial commitments.

"Cutting unnecessary spending, ensuring you have a suitable mortgage deal, and taking out suitable insurance such as mortgage payment protection insurance could make the difference between coping and falling into trouble.

Related Articles:
More than a million heading toward bankruptcy says report
Break-up linked to bankruptcy says report
Credit rating problem mortgage market expands
"Extreme" debt cases double says charity
Halifax attempts to repossess suicide father's home over £5,000