PricewaterhouseCoopers has warned that the drop in personal insolvencies may precede a troubled period for borrowers.

Recent statistics have shown that the number of people going bankrupt has dropped below the peak level of about 30,000 for the same period in 2006, the first reduction year-on-year for five years.

However, Pat Boyden, partner in the Business Recovery Services practice at PwC, said: 'While personal insolvencies are below their peak level of just under 30,000 in the last quarter of 2006, the recent rise in credit card debt suggests that further increases could be round the corner. Rises in credit card debt and repossessions are both worrying signs that consumers are feeling the pinch and turning to unsecured borrowing as means to make ends meet.'

PwC warned that the continuing problems in the sub-prime market may mean consumers find it harder to borrow their way out of trouble, leading to another wave of insolvencies in the coming months.

Further reading:

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