More volunteer for Bankruptcy as going bust loses its stigma

There is increasing evidence that going bankrupt is losing its stigma as consumers struggle with mounting debts.

Three quarters of all people who petitioned for Bankruptcy last year did so voluntarily, new figures show. While overall Bankruptcy petitions fell slightly last year, figures from the Ministry of Justice released yesterday showed more people initiating proceedings. Some 53,114 people petitioned in court to become bankrupt in 2007, up from 52,717 in 2006.

Vince Cable, Liberal Democrat Treasury spokesman, said: “These figures are clear evidence that more and more people are finding it impossible to keep up with repayments on their growing debts. For many people it seems that voluntarily filing for Bankruptcy is the only way to shed debts they simply cannot pay. As the credit crunch further impacts on the cost of borrowing, we need to wake up to the very real possibility of mass Bankruptcy and repossession across the country.”

The new figures come just two weeks after Insolvency Service data showed that the number of people declared insolvent fell for the first time in nine years during 2007. While the number of bankruptcies rose, the number of people entering into an individual voluntary arrangement (IVA) fell sharply.