135,089 people went into bankruptcy or entered into an Individual Voluntary Arrangement (IVA) or Debt Relief Order (DRO) last year, according to figures released by the Insolvency Service.

This represents an increase of 947 people compared to 2009.

However, overall levels of personal insolvency in the UK have decreased with 30,729 people entering into bankruptcy, IVA or taking advantage of the governments new DROs in the last quarter of 2010. There were more IVAs than bankruptcies in last quarter of 2010 for the first time ever with 12,508 people entering into an IVA in that time.

Chris Nutting, director of personal insolvency at KPMG, said: “Whilst the headline figures from the Insolvency Service show that bankruptcy numbers are falling