New figures have revealed that the number of people in England and Wales going insolvent has hit a seven-year high, due to unmanageable debt.
The Insolvency Service said personal insolvencies totalled 115,299 last year, a 16.2 per cent rise compared to 2017.
The Government agency said that personal insolvencies in the fourth quarter of 2018 were at their highest since the second quarter of 2010.
This was driven by the increase in the number of Individual Voluntary Arrangements (IVAs), the highest quarterly level of 22,717 IVAs were recorded.
IVAs are a way to avoid complete bankruptcy and this means an individual’s main assets are protected.
Last year, there were 71,034 IVAs an increase of 19.9 per cent compared to 2017.
There have been concerns among debt charities that people have been taking out IVAs who do not need them.
Moreover, there was an 11.2 per cent increase in Debt Relief Orders in 2018 and bankruptcies were up 9.8 per cent.
Last year, one in 401 adults in the UK became insolvent compared to one in 466 during 2017.