The number of Britons applying for an Individual Voluntary Arrangement (IVA) or bankruptcy rose to its highest-ever level during 2007, new figures show.
According to Credit Action, 111,359 people across the UK filed for bankruptcy or applied for an IVA during the year, an increase of over 13 per cent on the previous 12 months.
As personal debt problems increase, 15 per cent of British adults admit they struggle financially with unsecured personal loans of more than £10,000.
Research by the financial charity found that the average consumer in the UK uses 53 per cent of their monthly income to service debts, with as much as 35 per cent of wages being used to fund mortgage repayments.
An IVA is an agreement between the debtor and their creditors, in which the debtor will pay a percentage of what they owe over a five-year period. After that period expires, the debt is classed as settled.
