In the last three months of 2005, bankruptcies across the UK rose by 38 per cent, according to the latest figures.
This amounted to 20,461 individual insolvencies in October, November and
December - a 15 per cent increase on the three months before and a 57 per cent rise on the previous year.
Howard Archer, chief UK economist at Global Insight, said this showed that "many people have borrowed to their limits".
He went on to say that changes in bankruptcy laws had made it "more attractive for people to register as insolvent", making this a more popular way of dealing with their financial problems.
Further figures released by the Council of Mortgage Lenders (CML) have backed up the fact that the Britons are borrowing more.
In 2005 the number of homes repossessed rose by 70 compared to the previous year, but the CML says this is still low by historic standards.
Michael Coogan, director general of the CML, said: "Although the scale of increase is notable, the absolute numbers are still extremely small and set to remain so."
Mr Coogan concluded by saying that "now would be a good time for borrowers to review their financial commitments".To read more about Banking News, click here.
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