New figures from the Insolvency Service have revealed record levels of personal insolvencies in England and Wales, in the third quarter of 2009.

35,242 people were made insolvent during the third quarter – a 6.6 per cent increase on the previous quarter and a hefty 28 % increase on the same quarter of 2008.

Money troubles also continued for businesses with 4,716 compulsory liquidations being registered since July. In the last year, one in every 114 companies went bankrupt.

The recession has been driving up the number of personal insolvencies since the end of 2007.

The record numbers link to the number of people who have found themselves unemployed during the recession, but with debts to pay off.

This was linked with the onset of the credit crunch, which drew back the amount of cheap credit available and meant some were unable to apply for loans to borrow their way out of immediate debt problems.

Furthermore, the property market downturn also prevented them selling their homes, or drawing on equity.

Commenting on the figures, Louise Brittain, of accountancy firm Deloitte, said: “These figures are overwhelming, but not surprising, and unfortunately the end is not in sight.”

There is also some concern that the Insolvency Service's figures do not include debt management plans, where people agree with their creditors to pay a set amount each month, often of a token sum.

These schemes do not count as insolvencies and no central register is kept, though many thousands of struggling borrowers are thought to have been advised to accept such arrangements with lenders.