The record for the number of people declared insolvent has hit a record high, with 33,073 people in England and Wales declaring insolvency in the second quarter of 2009.

The figures, released by the Insolvency Service, are the highest since records began in 1960. The figures include bankruptcies, informal payment plans known as Individual Voluntary Arrangements (IVAs) and Debt Relief Orders (DROs).

The figures are 9 per cent higher than the first three months of 2009 and a 27 per cent jump from figures released at the same time last year.

A new personal insolvency order, the Debt Relief Order (DRO), was introduced in April this year. The figures, counted for the first time, show 1,978 of these orders were issued from April to June.

The DRO is aimed at those who have debts under £15,000 and not many assets. The DRO is a cheaper personal insolvency procedure and can help people wipe out their debts.

The Consumer Credit Counselling Service (CCCS), a debt advice charity, has praised these new orders calling them the "best solution" for many people struggling with their debt management. The CCCS have also predicted that they will eventually surpass bankruptcies.

Malcolm Hurlston, of the CCCS, also advised that while total bankruptcy figures may rise, this isn’t necessarily a bad turn of events.

"But that will be good news rather than bad, since many more people in serious debt will have found the right solution.

In the past, stigma and cost have put people off going bankrupt, in circumstances when it would have been best for them and neutral for their lenders"

The increasing number of people declaring insolvency comes as unemployment in the UK soars and the recession simultaneously pushes up borrowing costs.