The Government's Minister for Business, Ian Lucas, stated that "bankruptcy should be the option of last resort for those burdened with unmanageable levels of debt, and this won't change under our proposed reforms. However, once a person has decided that it is the only viable solution for their debt problems, these proposed changes will make it easier for them to proceed into bankruptcy. Many people delay making a petition for bankruptcy because they do not want to appear in court – meaning they can sink further into debt. We want to reduce that delay, while also freeing up valuable court time and resources to deal with other aspects of insolvency."

There has been a sharp 18% rise in the number of personal insolvencies in the third quarter of 2009 in comparison to the same period in 2008. At the same time the Uk also saw a 3% rise in house repossession figures according to the Council of Mortgage Lenders.

Joanne Wright, a partner at Begbies Traynor believes that we should expect to see "approximately 140,000 bankruptcies and Individual Voluntary Agreements… as a result of individuals, who have recently lost their jobs or face higher costs and tax burdens, taking stock of their finances ahead of the new year.

The Government's consultation period for the proposal closes on 8th February 2010 and yet again goes to prove just how deep the recession is for people across the UK.

If you are experiencing debt problems why not take a look at the Debt Advisory Line web site at www.debtadvisoryline.co.uk or alternatively call for free advice on 0800 157 7254. Debt Advisory Line have recently been awarded Debt Management Provider of the Year for the second year running and in a recent survey over 95% of their customers surveyed said they would recommend Debt Advisory Line's services to family and friends.

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