A record number of people were declared bankrupt in England and Wales last year - and the figure looks set to continue

A total of 134,142 people went bankrupt or took out Individual Voluntary Arrangements (IVA’s) or Debt Relief Orders (DRO’s) during 2009 - the highest number since records began in 1960.

The record number of insolvencies dwarfed the previous high of 107,288 set in 2006, with insolvency practitioners (specialised accountants) estimating that this level had already been passed by October of last year.

Insolvency practitioners are warning that 2009’s total was likely to be only the tip of the iceberg, with persopnal insolvencies expected to continue rising this year to reach an expected 150,000, with further annual increases of 12% which, in turn, are expected to last until 2012.

A record number of insolvencies chose to take an IVA last year at 13,219, in which interest is frozen in return for a set amount being repaid each month.

Insolency practitioners have warned that, although the UK is officially out of recession, the harsh reality is that people are still living beyond their means. Historical records prove that personal insolvencies will continue to rise after the recession finally ends and for sdome time to come.

The problem though, is that rises in taxation and cuts in public sector spending are predicted for 2010 and a lot of people will need to take drastic action to resolve their financial problems such as applying for bankruptcy.

Tags: Bankruptcy, debt, insolvencies, insolvent