Over 53,000 British people declare themselves bankrupt

Figures from the Ministry of Justice have revealed that a record number of people in England and Wales declared themselves bankrupt last year in order to escape their debts.

Last year, a total of 53,114 people petitioned to go bankrupt after being unable to cope with their debts, up from 52,717 in 2006 and double the number of people who declared themselves bankrupt in 2003.

Wales saw the biggest increase in the number of people declaring themselves bankrupt, with the figure increasing by 8% during 2007, followed by the North West, where it increased by 6%.

However, at the other end of the scale, there was a 9% fall in bankruptcy petitions from debtors in the South West during 2007 compared with 2006.

Two weeks ago, the Insolvency Service established that the number of people actually declared insolvent fell for the first time in 9 years during 2007.

But experts say they anticipate the number of people petitioning the courts for bankruptcy to increase again next year as the aftermath of the credit squeeze filters through.

Under rules introduced a number of years ago, being bankrupt now lasts for one year, as opposed to three years previously.

Mike Gerrard of accountancy firm, Grant Thornton, said the perception is that it is now easier to go bankrupt because it will be discharged after one year, but this shorter time frame doesn’t change the fact that your assets, for example, your house, are still up for grabs if you declare yourself bankrupt.

Those who go bankrupt will also have to deal with their credit rating being shot to pieces for years to come, concluded Mr Gerrard.

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