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When all else fails

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Bankruptcy is a dirty word. We shrink from hearing about financial failure, yet it is common: the Official Receiver's Office made 3,972 bankruptcy orders in the first six months of this year.

This shows that bankruptcies are creeping up again, mirroring the state of the wider economy.

Similar orders in 2006 totalled only 653. They rose to 11,063 in 2007 and peaked at 16,157 in 2009, dropping to 9,183 in 2010. If this year's half-year trend continues, the 2011 total will top 8,000.

So what drives people to take the drastic step of filing for bankruptcy?

Often, like the debtor profiled here (see facing page), it's the only option after a downward spiral of mounting credit card and loan debt, with crippling annual interest rates of more than 30 per cent.

'At least 90 per cent of the people who approach us have some sort of a credit card problem,' says Alan Wong Hok-ming, solicitor with personal insolvency specialists Yip, Tse & Tang.

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