Once again the number of personal insolvencies in England and Wales has hit a new record high, according to statistics from the Insolvency Service.

The third quarter figures show 27,644 insolvencies, of which 15,416 were bankruptcies and 12,228 Individual Voluntary Arrangements (IVAs).

The total number of insolvencies has increased 5.7 per cent from the second quarter this year and 55.4 per cent from the third quarter of 2005.

"If the current trend continues, the number of IVAs will overtake the number of bankruptcy next year and that is an indication that the IVA solution is becoming more popular than is good for people," the chairman of the Consumer Credit Counselling Service, Malcolm Hurlston, told the BBC.

However, James Falla from IVA provider Thomas Charles denied IVAs were being pushed at the consumer's expense: "The key is, advice has to be measured, correct and well-targeted.

"Nobody can enter an IVA without the acceptance of the creditors and that ultimately is the backstop," he argued in a BBC interview.

The Bank of England's interest rate rise in August is thought to have had an impact on insolvency figures, as borrowers with variable rate debts will have been hit with higher payments.

A further rate rise to five per cent is predicted later this week by many experts.

For many people a debt consolidation loan can be a good way to reconcile their existing card debts and manage their finances.