Support groups buckle as bankrupts quadruple

The rise has shocked some support and advice groups who are buckling under huge demand for their services from heavily indebted residents.

In 2000, just 58 people filed for bankruptcy, and despite decreasing in 2001 and 2002, the numbers have risen to a staggering 201 cases, representing a massive 246 per cent increase by 2007.

Priti Shah, a consultant with Debt Doctor, covering the Ealing area, said more people are experiencing debt as the economy is facing a downturn.

She said: "Debt builds up over time and essentially what triggers someone to have to take the course of bankruptcy is some kind of life-changing situation, such as caring for a loved one or losing a job.

"Public perception is that bank-ruptcy affects the poor, but this is generally not the case, with most of our clients from middle-income Britain.

"I think the upward trend will continue and part of the reason is because of the economic run up until the last six months, which saw large increases in spending.

"What we are currently seeing is a retraction from spending and a recessionary downturn, and many entrepreneurs are struggling as cash is not being spent.

"We work on the debtors' side and provide emotional and financial support for our clients."

The shocking figures follow a London-wide trend which saw bankruptcy applications rise across the majority of boroughs since 2000.

Richard Goodman, of the Citizens' Advice Bureau, said people's debt has been spiralling to frightening levels.

He said: "We're being inundated with requests for help, but what has been more striking than the number of people falling into debt is how much they own.

"Perhaps 10 years ago it was unusual for a client to have a debt of over £10,000, but now people are in debt mostly to the tune of £50,000 on credit cards and bank loans.

"Lenders have to be held to account in some degree. Their perception of their service has changed from lending to people who need it, to just profit making from them."

Greg Hands, MP for Hammersmith and Fulham, obtained the figures in a response he received from the Department for Business, Enterprise and Regulatory Reform during a parliamentary question.

Mr Hands said: "These figures bring more worrying evidence that our economy is built on debt.

"Behind every insolvency there is a personal tragedy and taken together they add to a growing social problem."

* For advice on debt call Advice and Law for All on 020 8600 3100, Christians Against Poverty on 020 8579 8882, or the Citizens' Advice Bureau on 0845 458 2515.