HIGH PERSONAL DEBT LEVELS LEADING TO INCREASED BANKRUPTCIES - CABLE

12.00.00am BST (GMT +0100) Fri 4th Aug 2006

Responding to figures showing an increase in bankruptcies and repossessions, Liberal Democrat Shadow Chancellor, Vince Cable MP said: "On average 290 people are now being declared bankrupt every day, this equates to an insolvency every five minutes.

"This is further evidence that high levels of personal debt are leading many people into financial difficulty and, in extreme cases, bankruptcy.

"There is currently a considerable degree of irresponsible lending and aggressive marketing to individuals of personal loans and credit. Lenders have an obligation to stop these practises and to provide greater levels of debt advice.

"With interest rates rising yesterday, families are likely to feel a further pinch on their budgets leading to further increases in individual insolvencies.

"The Government should be actively working with the financial services industry to achieve a national roll-out of independent advice centres, providing people with early access to financial health checks before they get into a crisis situation."

ENDS

Notes to Editors

The Insolvency Service figures released this morning show that there were 26,021 individual insolvencies in England and Wales in the second quarter of 2006 on a seasonally adjusted basis. This was an increase of 10% on the previous quarter and an increase of 66.3% on the same period a year ago.

This was made up of 14,915 bankruptcies, an increase of 32.5% on the corresponding quarter of the previous year, and 11,105 Individual Voluntary Arrangements (IVA's), an increase of 153.2% on the corresponding quarter of the previous year.

This equates to 290 individual insolvencies every day for the second quarter of this year or an individual declaring insolvency every five minutes.