The government's Insolvency Service said 27,644 people went bankrupt or entered into Individual Voluntary Arrangements (IVAs) to manage debts.
Overall, insolvencies are 55% higher than during the same three-month period in 2005 and are widely expected to top 100,000 for the entire year.
Experts have blamed greater personal debt for the rise in insolvencies. YOU DON'T SAY!
Significantly, the insolvency figures show that the proportion of people taking out IVAs has risen relative to those going bankrupt.
|| If the current trend continues,
the number of IVAs will overtake the number of bankruptcy next year
Malcolm Hurlston, CCCS
In total, 15,416 people went bankrupt between July and September. At the same time, 12,228 people entered into IVAs.
A year ago, just over 12,000 went bankrupt and fewer than 6,000 entered into an IVA.
The sharp rise in IVAs has been controversial.
IVAs are heavily marketed by providers, who make money from acting as go-betweens for lenders and borrowers.
Some debt charities have criticised IVA providers for marketing them to people who would be better off either going bankrupt or coming to an informal arrangement with creditors.
"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," said Malcolm Hurlston, chairman of the Consumer Credit Counselling Service (CCCS), a debt charity.
Lenders, too, are concerned at the rise in IVAs.
"Several lending institutions have raised concerns at these record levels and have commented on the limited extent to which the advice sector is regulated," Stephen Treharne, head of personal insolvency at accountancy firm KPMG, told BBC News.
In response, a leading IVA provider, Thomas Charles, told BBC News that they were reacting to a real consumer need and not pushing the IVA concept inappropriately.
|| After all my outgoings they left
me with just £15 a month free to spend
"If somebody in debt talks to a debt advisory firm, they should be given a full understanding of all the options - including bankruptcy, IVAs and informal arrangement plans," said James Falla, managing director of Thomas Charles.
"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 added.
Problems for debtors may just be about to get worse.
Next week, the Bank of England will decide whether UK interest rates should rise, thereby pushing mortgage repayments higher.
Most analysts predict that an interest rate rise from 4.75% to 5% is on the cards.
"I fear that more consumers will fail to meet their minimum monthly credit card and loan payments and will have to consider taking formal steps to deal with their over-indebtedness," Mr Treharne said.
Have you been affected by issues covered in this story? Have you ever been forced to declare yourself insolvent?
I went bankrupt in July this year and I can tell you it is such a
burden off my mind. I had been in trouble for over a year. I did
consider an IVA but I couldn't afford to make any monthly payments.
Bankruptcy is a good idea if you don't have a lot or no assets to speak
of. Creditors are still using tactics that are very close to
harassment. I did read about one man who killed himself over it. My
advice is to speak to an independent financial adviser not one of these
debt management firms which I think are bad news. My advisor was very
knowledgeable and was up to date with all the law changes unlike the
CAB who give out incorrect out of date information.
Melanie, London, UK
I work for a mobile phone company dealing with insolvency etc. We
seen a massive rise in the number of people that have gone insolvent
over the last year. It seems to be the thing to do! Rack up a load of
debit and then write it off, no one seems bothered any more, frankly
Ask yourself... would YOU lend money to someone you knew would have
difficulty paying it back? Probably not. But this exactly what
creditors are doing. I am a bankrupt and I STILL get letters offering
me credit from the SAME companies I owed thousands of pounds to! They
are throwing money at the consumer, knowing that some will never be
able to pay it all back. But creditors know they will make a lot of
money from those who will.
We have been in an informal arrangement with a debt management
for the last 2 years. We have recently found out that over half of our
debts have grown and as a result we are now facing bankruptcy. If
someone had advised us on this 2 years ago we would now be discharged
and on our way to finding our feet again. Instead we have more or less
wasted a load of money on this informal arrangement that would have
been better served helping us to recover our financial security and
paying to go bankrupt in the first place.
Karen Vincent, Guildford