A total of 134,142 people were declared insolvent in 2009 as the continued credit squeeze drove the figure above the previous record set in 2006

The number of people entering into insolvency in England and Wales rose to a record total of 134,142 last year, official figures from the Insolvency Service showed today.

Rising unemployment and the ongoing impact of the credit squeeze drove the figure beyond the previous record of 107,288 personal insolvencies set in 2006.

Today's figures show a total of 35,574 individuals were declared insolvent in the final three months of last year, 24.9% more than in the same period of 2008.

Although the number of bankruptcies fell by 5.5% year-on-year to 17,007, the number of individual voluntary arrangements (IVAs) – where borrowers arrange to pay off a proportion of their debt over a set period of time – leapt by 26.3% to 13,219.

A total of 5,348 of the insolvencies were in the form of debt relief orders (DROs) which were introduced in April last year and allow consumers with debts of less than £15,000 and minimal assets to write off their borrowing without entering into a full-blown bankruptcy.