Thousands seek help to ward off debt

More than 75,000 people have registered for “breathing space” from debts as the number of people going financially insolvent increased.

The figure from May last year is among data released by the Insolvency Service – which also shows the number of people going financially insolvent in England and Wales between April and June was seven per cent higher than the same period in 2021.

Some 28,946 personal insolvencies were recorded in the second quarter of this year – made up of bankruptcies, debt relief orders and individual voluntary arrangements (IVAs), which are agreements with creditors.

The Insolvency Service also said there had been 75,385 registrations under the breathing space scheme, which was launched on May 4 2021.

A standard breathing space gives people in problem debt legal protection from creditor action for up to 60 days.

Christina Fitzgerald, president of insolvency and restructuring trade body R3, said: "Price increases across the board mean that the impacts are being felt differently by different types of consumers.

"For those on the lower end of the income scale, budgeting can only stretch so far and it is worrying that, for some, credit cards and other types of debt may feel like the only option to cover even the essentials."

There was an 81% jump in company insolvencies in England and Wales between April and June, compared with the same quarter a year earlier.

The total was also 13% higher than in the first quarter of 2022 and the highest recorded since the third quarter of 2009.