The Liberal Democrat Party has attacked the government and banks for failing to tackle the growing problem of personal debt.
Liberal Democrat shadow chancellor Vince Cable says: “Hard working families are facing a three pronged attack from rising interest rates, rising unemployment and record levels of personal debt that is spelling catastrophe for many hard working families.
“On average over 300 people are now being declared bankrupt every day, this equates to an insolvency every five minutes.
“This is further evidence that high levels of personal debt are leading many people into financial difficulty and, in extreme cases, bankruptcy.
“With interest rates almost certain to rise next week, families are likely to feel a further pinch on their budgets leading to more increases in individual insolvencies.”
Cable adds: “With increased Council Tax, higher interest rates and winter fuel bills, this problem is only going to get worse.
“While repossessions remain below the levels seen in the early 1990s there are clearly big problems ahead.
“These figures demonstrate the complete absence of an adequate safety net in the mortgage market.
“There is currently a considerable degree of irresponsible lending and aggressive marketing to individuals.
“Banks and building societies need to ensure that when individuals take out mortgages they are fully aware of the risks, and that quality insurance products are available.
“The government should be actively working with the financial services industry to achieve a national roll-out of independent advice centres, providing people with early access to financial health checks before they get into a crisis situation.”