The effects of the credit crunch and recession have caused huge problems for many individuals with personal loan and credit card debt over the course of the past couple of years or so. But despite the fact that the UK economy is starting to show signs of recovery, the number of people becoming insolvent through their loan and card debts has continued to increase.

The Government has just released the latest figures from the Insolvency service for the last three months of last year and the statistics have revealed that the level of personal insolvency through bad personal loan and credit card debt has continued to increase now for eight consecutive months and has reached its highest level ever recorded.

Over the course of last year, there were 134,142 individuals in the UK who were declared insolvent and the predictions are for these figures to continue increasing throughout the coming twelve months.

In the three months run up to the end of last year alone, there were 17,007 people declared bankrupt, 13,219 people entered into an Individual Voluntary Arrangement (IVA) and 5,348 Debt Relief Orders (DRO’s) were imposed on individuals. With a total of 35,574 individuals facing severe difficulties with their loan and credit card debts, this is an increase of nearly a quarter above the figures for the same time twelve months previously.

One insolvency expert, Pat Boyden commented on the alarming figures, “The huge numbers of people entering insolvency demonstrates the real effect the recession is having on the average person in the UK. However, the one chink of light in this worrying story is that more of those people entering insolvency are entering into IVA’s as opposed to straight bankruptcy, meaning they are seeking ways of settling their debts.”