INSOLVENCY experts in the region have warned that high levels of bankruptcy are likely to increase, with Christmas spending leading consumers into financial difficulties.

Department of Trade and Industry (DTI) figures released yesterday showed a surge in bankruptcies during the past three months affecting more than 9,000 people.

R3, the Association of Business Recovery Professionals, said the rise had been caused by credit card debt.

Harvey Madden, R3 spokesman for North Yorkshire and an insolvency expert with Taylor Rowlands, of Yarm, near Stockton, said: "Many of the bankruptcies are a consequence of credit card debt and with Christmas around the corner, we believe we will see more rises in bankruptcy levels.

"We are concerned that those already struggling with debt will bury their heads in the sand until after the festivities."

The DTI's figures showed a quarterly increase of 4.2 per cent and a 28.5 per cent increase on the previous year.

During the past quarter, 11,967 people were declared insolvent, including those entering bankruptcy and those entering an individual voluntary arrangement with their creditors.

This is the highest quarterly number on record and on an annual basis, represents a 31.1 per cent increase.

Experts have blamed the rise on recent changes in the law reducing the period of bankruptcy from three years to 12 months.