Bankruptcies up almost one-third

Concerns are mounting about rising debt levels

The number of people declaring themselves bankrupt shot up in recent years, official figures have shown.

The number of bankruptcies increased from 21,611 in 1999 to 28,017 in 2003 - a rise of almost 30%.

Sir Andrew Large, a deputy governor of the Bank of England, recently warned that household debt could reach 1990s levels.

Some commentators have predicted Britons will have debts of £1 trillion by this summer.

Sir Andrew said "the balance of probability lies with the optimists" over debt.

But he added: "it is likely that potential vulnerabilities from increased gearing are rising."

People are borrowing at the very edge of their means Malcolm Bruce MP

"And we know from experience that unexpected shocks from one source or another can upset individuals' predictions and behaviour," he added.

Debt warning

According to a regional breakdown of bankruptcies, the South East suffered the biggest rise over the past four years.

There were just 2,931 bankruptcies in 1999 but it rose to 4,618 in 2003 - a rise of 57.6%.

The Liberal Democrat Shadow Trade and Industry Secretary, Malcolm Bruce MP, who obtained the figures through a parliamentary answer, said the figures were a cause for concern.

"It is a stark warning to people who borrow heavily on credit cards and store cards.

"People are borrowing at the very edge of their means and many are getting into debt way over their heads."

From 1 April, new laws governing bankruptcy - in a move to encourage entrepreneurism - will come into effect.