More signs of the impact of rising costs on all of us are shown by the ever growing numbers of us going bust!
Between July and September a total of 27,087 of us were declared insolvent; that’s a rise of 8.8% on the second part of the year and 4.6% higher than this time last year!
The number of individual voluntary arrangements (IVAs), which involves you reaching a formal agreement to repay a portion of your debts to your creditors, was also up.
Around 17,000 of you have been declared bankrupt, 4% more than in the second quarter and 9% more than during the same period of 2007.
A further 10,000 of us are likely to have taken out an Individual Voluntary Arrangement; 6% higher than during the previous three months.
It now looks likely that the number of personal insolvencies is set to reach record levels in 2009, perhaps even reaching 150,000.
But its not just individuals that are suffering, but business too.
The number of companies put into administration soared by more than 50% year-on-year to 1,007 in the three months to the end of September.
PricewaterhouseCoopers thinks 4,039 businesses across England and Wales will have been made insolvent during the period as the credit crunch continues to hit firms.
- Managing your debt is getting harder
Experts had predicted a rise in insolvencies this year as higher energy bills and the credit squeeze put pressure on both companies and individuals.
Those of you that who would once have found it easy to consolidate your debts into a remortgage, are now finding that option is unavailable as lenders hike their minimum deposit sizes and impose tighter borrowing criteria.
It also appears that banks are also making it harder for you to enter into IVAs, with some increasing the amount they are willing to accept as part repayment of debts. Insolvency experts at KPMG said that 17% of IVAs proposed in the third quarter were rejected. Some of you unable to set up an IVA could ultimately be pushed into bankruptcy.
Catherine Matthews, partner at licensed insolvency practitioners Tomlinsons, said the figures were "grim", saying:
"Unfortunately, I expect the rise in personal insolvencies to continue into 2009 as the recession spreads from the banking and property sectors into the broader economy. We're already seeing signs of this and urge people to take action as soon as possible if they are starting to struggle. The worst thing to do is stick your head in the sand and hope it will go away."
If you are struggling with your finances then do not panic. You can get advice and support that can help you in your current circumstances.
Money Hospital provides a free debt enquiry service.
We have partnered with a number of trustworthy debt specialists, so you should speak free of charge to an independent debt adviser who can provide you with advice and solutions to help you resolve your debt and credit problems.
Other sources of free debt advice:
Citizens Advice: The Citizens Advice service is a network of independent charities that helps people resolve their money, legal and other problems by providing information and advice and by influencing policymakers.
Consumer Credit Counselling Service (CCCS): it is a registered charity offering free, confidential advice and support to anyone who is worried about debt. You can call their freephone helpline on 0800 138 1111.
Payplan: Debt management and free confidential debt advice on resolving debt problems.
Shelter: If you are struggling with the cost of your mortgage or with any other housing problem, call Shelter's free housing advice line on 0808 800 4444.
The Financial Services Authority: The industry regulator has a series of practical guides on how to manage your money.