According to Department of Trade and Industry statistics, 7,831 people filed for bankruptcy in England and Wales in the third quarter of 2002. Worryingly, this is an increase of 2.0% on the previous quarter, 6.4% up on the same period last year.

According to insolvency expert Jeremy Willmont, partner at Moore Stephens, the biggest number of bankrupts are individuals who can't pay their mortgages or credit card debts.

He said: 'The real concern is the number of bankruptcies of individuals.

'There is a limit to how much people can borrow before they are unable to repay their debts. Clearly, more and more people are reaching that limit.'

In contrast, company insolvencies dropped on a year-on-year basis, as 3,873 companies filed for insolvency last quarter. This was a drop of 6.1% on the previous quarter, but still 5.2% increase on the third quarter of 2001.