The number of people facing bankruptcy rose by 7% in the third quarter of the year, against the same period last year.

A total of 13,653 people in England and Wales petitioned for bankruptcy in the three months to the end of September, Ministry of Justice figures showed.

This is the second-highest number recorded by the Ministry of Justice since 1995.

There were also 3,184 company winding-up petitions, an increase of 13%.

The number of creditor petitions rose 10% to 5,499 in the quarter.

Analysts expect bankruptcies to rise as the downturn hits home.

The rise in the number of winding-up petitions was "a clear taste of things to come", said Howard Archer, chief UK and European economist at Global Insight.

"Individual bankruptcies are poised to surge over the coming months in the face of recession, faster rising unemployment, higher debt levels, very tight credit conditions and more and more people being trapped in negative equity," he added.

Insolvency rise

The Ministry of Justice figures show the number of people at the start of the bankruptcy process.

There has also been a sharp rise in the number of people and companies in England and Wales actually being declared insolvent - the end of the process.

Individual insolvencies went up by 8.8% in the third quarter of the year to reach 27,087, government figures showed earlier this month.

Corporate liquidations also went up by 10.5% in the same period, to 4,001.

The increases have been widely predicted because of this year's sudden economic downturn and the consequent rise in unemployment.

The rising trend started this year as the economy stated to slowdown under the impact of the credit crunch.

The number of firms being liquidated is now up by 26.3% on a year ago.



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