THE NUMBER of people in Dundee forced to declare themselves bankrupt increased by a fifth last year and has risen nearly 200% in the past eight years.

In the financial year 2002-03, 135 people in Dundee declared themselves bankrupt but this figure jumped to 162 people in 2003-04 as personal debt levels have reached new highs.

Only 57 people were declared bankrupt in 1996-97.

The Scottish Executive figures show debt is showing no signs of slowing.

Despite bankruptcy affecting a person’s ability to buy a house or get a job, more and more people are being forced to take what they see as the only escape route from their debts.

A spokesman for accountancy firm KPMG said the increase in bankruptcy levels suggests that the simplified approach to bankruptcies is making the procedure more attractive to debtors.

Steve Treharne, head of personal insolvency at KPMG said, “In particular, the early discharge from bankruptcy, potentially after only a few months, allows a debtor to quickly restart his financial life and reduces the stigma attached to bankruptcy.”

In Scotland as a whole, the problem of bankruptcy is also on the increase.

A total of 3309 people were declared bankrupt last year, up 81 on 2002-03 and 775 on 1996-97.

Deputy justice minister Hugh Henry, in a Parliamentary written answer to a question from Banff and Buchan SNP MSP Stewart Stevenson, released the figures.

Figures released by the Department of Trade and Industry show that 35,898 people in the UK were made bankrupt in 2004, the highest annual level since records began and a 28% increase on 2003 totals.

Separate figures released by the Department of Constitutional Affairs confirm another trend—people declaring themselves bankrupt, rather than being forced into bankruptcy by a creditor, are driving the increase in bankruptcies.

In the last year, 75% of all bankruptcies were people bankrupting themselves—the highest proportion ever, and more than double the rate of only four years ago.

“These statistics point to a new high level of bankruptcies becoming the norm rather than a one-off spike fuelled by changes in the law as was predicted when the bankruptcy legislation changed in April 2004,” said Mr Treharne.

“I believe we can expect to see annual rates of 60,000 bankruptcies in the UK within the next three years.

“Creditors await the outcome of recently announced plans to ‘name and shame’ culpable bankrupts by pursuing bankruptcy Restriction Orders introduced in the Enterprise Act,” he said.

“The orders allow a court to place restrictions on a bankrupt for up to 15 years.”