Bankruptcies rates 'soared during 2003'

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Bankruptcies rates 'soared during 2003'

Bankruptcy rates in the UK soared by almost a third in 2003, figures released today show.

Bankruptcies are now at their highest level since records began in 1960.

Data from the Department of Trade and Industry claims that more than 10,000 people filed for bankruptcy between October and December 2003, an increase of 12 per cent on the previous quarter. During the same three-month period in 2002, 7,967 people were bankrupted.

However, the number of company insolvencies fell by more than a fifth in 2003.

The figures come the day after the Bank of England's monetary policy committee raised interest rates by 0.25 per cent to 4 per cent. With the resulting rise in the cost of borrowing, many people are going to find themselves struggling to meet debt repayments.

Debt advice group Debt Free Direct estimates that yesterday's rate hike will increase the number of people who are struggling to keep up with their debts from 2.3 million to 6.46 million.

Chief executive Andrew Redmond said: "The rise in individual insolvencies is a direct consequence of the high level of consumer debt. More and more people have overstretched themselves, then there is a change in their lives, their income goes down, and they can't afford their debts any more."

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