13% Rise In Personal Bankruptcy In Last 12 Months

12.00.00am GMT Fri 7th Nov 2003

33,945 people have been served with bankruptcy orders over the last year according to new Government figures released today. This represents a rise of 13% over the previous 12 month period, up from 29,961. Monthly figures show personal bankruptcies in the third quarter of 2003 running at almost 17% higher than the third quarter of 2002.

These figures come just days after the Liberal Democrats released figures showing that individual personal debt has leapt by 50% since 1997. The average person now owes over £5,300 in unsecured loans. The average annual household debt stands at over £37,000.

Number of Insolvencies in England and Wales (seasonally adjusted)

Individuals Q4 2001 - Q3 2002 29,961

Individuals Q4 2002 - Q3 2003 33,945

Percentage Rise over last 12 month 13%

Source: DTI Statistics Releases: Insolvencies

Malcolm Bruce MP, Liberal Democrat Shadow DTI Secretary, said: "These bankruptcy figures will come as another warning to those who are getting in debt over their head."

"With over 33,000 people being declared bankrupt and 20 million cases of credit arrears passed to bailiffs over the last year, it looks like the bailiffs business is about to enter its own boom time."

"The rate rise this week shows the Bank of England is desperate to damp down borrowing. The message to people now must be, think before you borrow - and don't borrow to your limits as rates may rise further."

ENDS

Notes to Editors

The DTI Figures can be found at :

http://www.wired-gov.net/EDP8203R7W/WGArticle.asp?WCI=htmArticleView&WCU=ART

CL%5FPKEY%3D20783

For individuals the term bankrupt is used to indicate insolvency. Insolvent individuals in England and Wales are dealt with mainly under the Insolvency Act 1986. A bankruptcy order is made on the petition of the debtor or his creditor when the Court is satisfied that there is no prospect of the debt being paid.

Source: DTI Statistics Release: Insolvencies In The Third Quarter 2003

Number of Insolvencies in England and Wales (seasonally adjusted)

Percentage change

2002 2002 2003 2003 2003 Q3 2003 on:

Q3 Q4 Q1 Q2r Q3p Q2 2003 Q3 2002

Individuals 7779 7967 8146 8738 9094 +4.1 +16.9

p = provisional, r = revised

A recent report by Leeds University Business School suggests there has been a 70% rise in credit arrears over the past 2 years, with twenty million cases being passed to bailiffs in the past year

Average Annual Personal Debt

Source: Letter from Karen Dunnell (Director of Survey's and Administrative Sources Department at the Office of National Statistics) to Dr. Vincent Cable, dated 30 September 2003:

Average annual income and unsecured debt per person, UK, 1997-2002

Annual Income per person (£) Unsecured Debt per person (£) Unsecured

Debt as a Percentage of Income

1997 12,400 3,540 28.5

2002 15,310 5,330 34.8

% increase 1997 - 2002 23.47% 50.56% 22.1%

Average Annual Household Debt

Source: Letter from Len Cook (National Statistician at the Office of National Statistics) to Dr. Cable dated 16 July 2003

Year Average Annual Household Debt £ Average Annual Household Income £

% Debt Higher Than Income

1997 24,500 23,400 4.7

2002 37,500 28,800 30.2

% increase 1997-2002 53 23