Record number of insolvencies

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The number of people declaring themselves insolvent in the first three months of 2007 is a new record high.

Between January and March there were 30,075 insolvencies in England and Wales, 23.9 per cent up from the same period last year.

But the official statistics from the government's Insolvency Service show that the rate of increase is slowing, with today's figures up 1.2 per cent on the previous quarter.

Of the 30,000-plus total, 16,482 people declared themselves bankrupt and 13,233 took out individual voluntary agreements (IVAs); a deal which can allow people the chance to retain their home if they repay their debts over a set amount of time.

IVAs are becoming increasingly popular with debtors, with their use rising 4.7 per cent on a quarterly basis. In comparison, the number of bankruptcies recorded in the first three months of 2007 was down 1.3 per cent on October to December's figures.

Commenting on today's statistics, James Falla, director of debt consultant Thomas Charles said: "Debt is still a serious issue in Britain and as long as people continue to take a 'buy now, pay later' approach to the expenses of life with little thought for saving for a rainy day, there will be an inevitable portion of the population that will run into financial difficulty."

Other figures released today by the Insolvency Service show that there were 3,113 liquidations in England in Wales in the last quarter on a seasonally-adjusted basis, a fall of 2.8 per cent on the previous three months.

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