Quarterly figures from the National Insolvency Service out today show the total number of individual insolvencies has increased by 46% on the same period as last year.

Bankruptcies have risen by 30.9% and Individual Voluntary Arrangements (IVAs), an alternative to bankruptcy, have risen by 95% when compared to the figures for the same period last year.

Desmond Flynn, Insolvency Service, inspector general, said: "The very dramatic increase in the number of IVAs shows that record numbers of people are trying to deal with their financial difficulties without recourse to bankruptcy. They know that bankruptcy is not an easy option and that if bankrupts can pay towards their debts, they will pay."

"Discharge from bankruptcy now happens after one year and not three, but bankrupts are now liable to make contributions from their income for three years. Bankrupts have agreed to pay some £9 million this year towards their debts."

The screw is also tightening on those who have been guilty of misconduct. In the six months to September 2005, 165 people have been made subject to bankruptcy restriction orders or undertakings for periods of between 2 and 11 years. Those orders or undertakings extend the restrictions of bankruptcy.

In addition the Secretary of State has issued directions to take proceedings against another 313 bankrupts and Official Receivers are working on the submission of a further 600 reports. The most common allegations made in support of applications are:

• Contributing to the bankruptcy by gambling or extravagance
• Incurring debts with no reasonable prospect of being able to meet the liability incurred;
• Entering into transactions to prefer friends or relatives ahead of other creditors or at a value less than the true value.

Today's figures also show the total number of company liquidations rose by 14.2% when compared to the same period last year. Compulsory liquidations have risen by 35.7% and creditors voluntary liquidations by 1%, compared to the same period last year.

The figures also show that receiverships fell by 16.3%, but administrations continue to increase with a 47.3% rise on the same period as last year. The number of companies entering administration has risen for the eighth successive quarter.