Some 11,535 people went bust in England and Wales during the second quarter of the year, up almost a third on the same period in 2003. But experts were divided over whether controversial changes to bankruptcy law, introduced in April, were to blame for the new high water mark.

Many in the profession had predicted that bankruptcy rates would soar after the discharge period was cut from three years to less than 12 months.

'It looks like the new Enterprise Act provisions' contributed to this rise, suggesting that bankruptcy is now seen as a more acceptable way of dealing with debt difficulties,' said Steve Treharne, head of personal insolvency at KPMG.

But the Insolvency Service rejected the claim. 'The bankruptcy system is not softer; the legislation did not affect the number of people going into bankruptcy,' a spokeswoman said.

Gareth Hughes, president of R3, the Association of Business Recovery Professionals, agreed. 'The quarterly bankruptcy increase would appear to be in line with the upward trend generally. The message that bankruptcy is no soft option is perhaps getting through.' Patrick Boyden, insolvency partner with PricewaterhouseCoopers, added: 'With rising interest rates, the pressures on those who have borrowed to the hilt are unlikely to disappear soon.'