2:18pm UK, Friday May 16, 2008

The number of people facing bankruptcy climbed in the first quarter of this year, official figures show.

180 coins in palm of hand money

Worse to come?

A total of 13,080 people applied to be made bankruptcy, 12% more than during the previous three months.

But it is well down on the figure of 15,100 for the same period in 2007.

There was also a 6% rise, to 4,851, in the number of bankruptcy petitions by creditors during the first quarter.

On top of this, 2,965 companies were facing winding up petitions, up 3% from the previous quarter and the third successive quarterly rise.

The statistics, from the Justice Ministry, provide futher evidence that more people are struggling to cope with soaring bills.

Last week first quarter figures showed the number of people facing home repossession rose to its highest level for 16 years.

The number of people declared insolvent also rose during the period to 25,264.

Howard Archer, chief UK economist of Global Insight, said he was expecting further rises in the bankruptcy figure this year.

He explained: "The economy was still growing in the first quarter of last year and it was really only late in 2007 that it started to slow markedly."

Home energy bills have risen by up to a fifth this year, while petrol prices have soared by around 25% during the past 12 months.

Homeowners are also facing higher mortgage costs as the global credit crunch continues to bite.