UK bankruptcies hit record high

New figures from the Insolvency Service show a record number of bankruptcies, while lenders have been warned to be alert to rising numbers of unemployed people.

Between April and June there were 26,021 bankruptcies in England and Wales, the highest number ever and well above the 15,645 for the same quarter last year.

After 23,351 insolvencies in the first three months of the year, there are predictions that the total for 2005 could be as high as 100,000.

Analysts pointed to a change in bankruptcy laws in 2004 which made it easier for people to offload their debts and reduced the amount of time it takes to be discharged from three years to just twelve months.

Meanwhile, solicitors Moore and Blatch warned lenders to be alert to rising unemployment figures.

The firm said lenders need to keep a watchful eye on arrears as recently published statistics from the Office for National Statistics show the Claimant count for the unemployed has risen 11.3% in the 12 months to May 2006 and job vacancies fell by 8.5% across the same period.

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