By Safira Ali and Phil Coleman

Last updated 11:35, Friday, 09 May 2008

A GROWING number of west Cumbrians who are struggling to cope with debts are declaring themselves bankrupt, say money advice experts.

Staff at Workington’s Citizens’ Advice Bureau (CAB) say that they are seeing more people than ever before who are prepared to consider bankruptcy as a way to escape their mounting debts.

A recent change in the law has simplified the rules governing bankruptcy, which no longer carries the stigma of shame it once had.

CAB staff say the number of bankruptcies has snowballed since the change.

There are also fears that the credit crunch will make it harder than ever for people who could previously have borrowed to see them through a temporary financial crisis.

Clive Johnston, the Workington bureau’s money advice supervisor, said: “We have gone from seeing dozens of bankruptcy inquiries in a year to seeing hundreds. It’s now something we get asked about every day – and I believe that the people we’re seeing are just the tip of the iceberg.”

Whitehaven County Court confirmed there has been a steady increase in the bankruptcy petitions issued through the court, which serves west Cumbria.

In the year to December 2007, there were 200 petitions – formal applications to the court – for people to be declared bankrupt.

This compared to 143 petitions in 2006, while so far this year there have been 59.

Bankruptcy hands over the administration of a person’s debts to an official receiver, who must share out the person’s assets fairly among his or her creditors.

The appeal is that a person can be discharged from bankruptcy in between one and three years, with all the remaining debt written off.

Mr Johnston said that people were getting into debt for a variety of reasons.

“It’s down to credit cards, store cards, unsecured bank loans, secured loans and door step loans,” he said. “It is not unusual for someone on below average income to have four credit cards.

“It’s been a mixture of the ease of people obtaining credit and a cultural change and peer pressure.”

Last year, the bureau saw 1,117 people who needed money advice, whose collective debt was £12.7 million.

Mr Johnston said: “We’ve seen families sacrificing to pay non-essential creditors.”

After a bankruptcy order had been made against a person, he or she cannot obtain credit above a certain limit without declaring their bankruptcy. Nor can a bankrupt open new bank accounts, be a company director, or take part in the managing a company without the leave of the court.

If you are concerned about debt, you can get information from Workington CAB on 01900 604735.

SAli@cngroup.co.uk