Bankruptcies could rise over course of this year due to debt levels

Officials have expressed concern over the level by which bankruptcies and insolvencies might rise over the course of this year, with the number of people that are struggling to keep up with their debts. Higher prices on services and products such as energy, housing, petrol, and food are making the situation even worse for many people in debt.

Some experts predicts that over the course of 2008 around 130,000 could end up becoming insolvent through an IVA or bankruptcy, and nearly 30,000 are expected to become insolvent during the first quarter. It is through that around 10,000 of these may have to become insolvent as a direct result of their Christmas spending.

One industry official stated: "This high average level of debt clearly indicates that too many people have borrowings that they have no realistic hope of repaying. Any excessive spending over Christmas and at the New Year sales, especially where goods are paid for on credit, risks tipping even more consumers over the edge."

In 2007 around 110,000 people declared bankruptcy or entered into an IVA according to recent figures. The 130,000 figure expected for 2008 would reflect a rise of around 20%