MORE people were unable to pay their debts in Cumbria in 2022, new figures show.

The figures come as Citizens Advice warns people are at risk of 'spiralling into debt' amid the cost-of-living crisis.

A person becomes insolvent when they are unable to pay their debts – and are left with a choice of declaring bankruptcy or taking on measures to pay them back.

NEW figures from the Insolvency Service show there were 1,138 personal insolvencies in Cumbria over 2022, up from 931 in 2021.

However, this was still lower than before the pandemic – in 2019, 1,142 insolvencies were registered in the area.

The same figures show across England and Wales there were 119,000 insolvencies in 2022 – up from 110,000 the year before, but down from a peak of 122,000 in 2019.

Morgan Wild, head of policy at Citizens Advice, said: “The cost-of-living crisis is far from over. We’re seeing huge numbers of people under significant financial pressure, with many at risk of spiralling into debt.”

While bankruptcies have declined nationally in recent years – from nearly 17,000 in 2019 to under 7,000 in 2022 – there have been an increasing number of 'Individual Voluntary Arrangements', which can involve high fees from private providers.

IVAs involve a person in debt agreeing to a repayment plan with their creditor, who may agree to reduce or stop interest payments over the same period.

In Cumbria, 801 IVAs were granted in 2022, along with 48 declarations of bankruptcy.