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Debt figures released this week by the Insolvency Service show that there is a clear divide in the numbers of personal insolvencies occurring in the North and South of the UK. The data for England and Wales gives a breakdown of the geographical areas in which personal insolvencies are most prevalent.

The highest rate of personal insolvencies such as bankruptcies and individual voluntary arrangements was in the North East of England in 2009 while the lowest level was in London.

Personal insolvency numbers are currently at record highs due to so many people finding themselves out of work and with debts in the downturn.

The new figures show that the highest levels of insolvencies were in the North East where there were 38.1 personal insolvencies per 10,000 adults in 2009. This was higher than the average in England and Wales of 31.1 and considerably higher than the lowest at 19.6 in London.

The North East and London were, respectively, also the locations for the highest and lowest rates of personal insolvencies in 2008.

Analysts have pointed out that the high figure is unsurprising as the region had higher than average unemployment even before the recession. The downturn also his the regions construction industry particularly badly.

However, in 2008 the South West of England was at the highest level. This region remains the second highest in 2009 with 35.9 personal insolvencies per 100,000 of the population.

On a more local level, Ealing and Wandsworth in London had the lowest personal insolvency rates, apart from the City of London, although the numbers were up slightly in 2009 compared with 2008.

Typical of the average across England and Wales are the Wirral and north-east Derbyshire.

At the top end of the scale are Derwentside, Easington and Cannock Chase, which had the highest personal insolvency rates per 10,000 adults in 2009. They had all seen large increases compared with 2008.

Although these new figures show the picture in 2009, data already published shows that large numbers of people are facing debts in 2010. The number of people being declared insolvent in England and Wales has been at record highs for five consecutive quarters. There were 35,682 personal insolvencies in the first three months of 2010, a 17.9% increase compared with the same period a year earlier.

Debt charities are urging people to approach advice agencies for help as soon as they realise they are facing financial difficulties.

Insolvency comes in three forms in the UK. The first, bankruptcy, is the traditional way of escaping overwhelming debt. Bankruptcy lasts just one year but bankrupts are likely to lose all their assets including their house to pay something to the creditors.

The second form of insolvency is an Individual voluntary arrangement (IVA). This is a deal between the debtor and their creditors which is overseen by an insolvency practitioner. The IVA’s have less stigma attached to them, less chance of losing assets such as homes, but does involve paying some of the debts in one go or over a number of years.

The most recent tools for dealing with insolvency are the Debt Relief Orders introduced in April 2009. These allow consumers with debts of less than £15,000 and minimal assets or surplus income to write off debts without a full-blown bankruptcy.

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While the economy and the housing market seem to be returning to strength, there are some signs that the UK is still having financial problems. One such sign to emerge this week has been the announcement that there has been another rise in the amount of credit card debt being written off by banks and other lenders.

Figures from the Bank of England show that write-offs rose to £1.25bn in the first three months of 2010 which was the second-highest quarterly amount on record.

Last year, a record £4.12bn was written off by credit card lenders, amounting to about 10% of all money lent on credit cards.

The amount of money written off on mortgages fell to £160m, the lowest quarterly figure for 18 months, as house prices rose again and the number of homes being repossessed fell back. The number of repossessions the UK fell by 7.5% in the first three months of 2010, from 10,600 in the last three months of 2009 to 9,800.

This is a great relief, especially for those who were living in fear of losing their home.

Somewhat unsurprisingly, the Bank of England said in its latest Financial Stability Report that losses on credit card lending had been a prime factor in driving up the interest rate margin charged on them.

Its statistics show that the average UK credit card rate was 16.51% in April this year, slightly higher than in July 2007 when it was 15.2%.

But in that time bank rate has fallen from 5.75% to just 0.5%, where it has been since March 2009, giving the card companies a much larger cushion.

With the amount of debt being written off still high it seems unlikely that lenders are going to drop their rates soon. Would be borrowers are still advised not to use credit cards in the current climate unless they can make interest free payments on time because the costs of this type of borrowing is still much too high.

As the economy continues to stabilise the card companies will eventually have to drop their rates. However, with unemployment still high and the ever-present temptation for cash-strapped people to rely on their credit card, the companies know that for the moment, the high rates mean high profits.