The deteriorating economy has contributed to a sharp rise in the number of people struggling with debt, according to figures released yesterday.

The Ministry of Justice (MoJ) reported there were 13,653 bankruptcy petitions in courts in England and Wales in the third quarter of 2008, 7 per cent increase on the same time last year.

Frances Walker, of the Consumer Credit Counselling Service, a debt charity, said: “We expect personal bankruptcy figures to rise even further next year as the downturn gets worse. Unemployment rates are climbing and household budgets are under growing pressure from mortgage payments, utility bills and the cost of everyday items.” .

This week the Office for National Statistics said the number of jobless Britons grew by 140,000 last month to hit 1.82 million, the highest for 11 years. The Registry Trust also released figures showing a 21 per cent increase in the number of active county court judgments against borrowers who had missed payments on personal loans and credit cards in the three months to September compared with the same period last year.

The figures also indicated a 43 per cent fall in the number of people who settled their debt in full. Chris Tapp, director of Credit Action, a debt charity, said: “Borrowers are really squeezed and are finding it more difficult to refinance as the cost of new loans has increased considerably. Households stretched themselves in recent years and 2008 may have been the year the elastic snapped.”

The MoJ also reported 3,184 companies lodging winding-up petitions with the High Court and county courts of England and Wales, 13 per cent higher than at the same time last year.

Howard Archer, chief UK and European economist at IHS Global Insight, said: “The marked rise in the number of companies being wound up in the third quarter is a clear taste of things to come as extended economic contraction, very tight credit conditions and intense competition will exact an increasingly heavy toll on companies.”