Early estimates into a prospective rise of the number of Brits declaring insolvency during Q1 of this year have unfortunately come to fruition.

Recently released statistics show that the number of people entering into IVA agreements and declaring insolvency surpassed the 25000 mark, equating to a rise of more than 1.5% compared to the fourth quarter of 2007.

However, it has also been noted that although the country is currently in the midst of a major financial reshuffle as a result of the credit squeeze, and in spite of the increase coming at the most common time for insolvencies (post Christmas) the figure is actually 1/6th lower than it was during the first quarter of 2007.

It has also been revealed that of the total number of people declaring insolvency during Q1 of this year, more than 2/3rds have come by way of Bankruptcy, leaving the remaining 1/3rd of insolvents opting to enter into an IVA agreement.

One of the biggest surprises is that the majority of debtors have chosen the Bankruptcy route over an IVA. It is though that a spate of bad press surrounding the IVA procedure during 2007 is the primary reason for the decline in popularity during 2008.