Bankruptcy fuelled by credit card spending

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Credit card spending is responsible for many declarations of bankruptcy, a law firm advises.

According to Macbeth Currie, the ease with which credit cards may be obtained leads many consumers to overspend, resulting in them becoming bankrupt.

"With personal finance its a case of people just loading up credit cards because theyre so easy to obtain," suggests senior consultant Duncan Philp.

"It just seems to be a modern phenomenon that people are perfectly happy to go through and a few years down the line theyre back with money again."

This contrasts with the situation ten years ago, Mr Philp adds, when consumers were "terrified" of being declared bankrupt.

The Insolvency Service is currently operating a consultation period on the proposal to allow individual voluntary arrangements to be obtained with the permission of the majority (51 per cent) of creditors, rather than the current 75 per cent which must agree.

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