THE credit crunch is claiming ever more Hampshire residents, with the numbers of people declaring themselves bankrupt in the county rising by a quarter.

The latest statistics show a 25 per cent increase in people petitioning for their own bankruptcy in the county, as opposed to being forced into bankruptcy by a creditor, from 289 cases in the fourth quarter of 2007 to 360 cases in the first quarter of 2008.

The increase in Southampton was slightly lower than the rest of the county with a rise of 15 per cent, from 123 in the fourth quarter of 2007 to 142 in the first quarter of 2008.

Nationally, the three months to March 31 saw an increase of 11 per cent in the number of people making themselves bankrupt, according to new figures from the Department of Justice.

The figures reveal that 13,275 people successfully petitioned the court to bankrupt themselves and 8,805 agreed an IVA in the quarter January to March 2008.

Mark Sands, director of personal insolvency at accountants KPMG's South Coast office, said: "People carry on digging a hole without realising they're in too deep.

"Typically they are £50,000 in debt. It starts with a few small things - conservatory or a holiday or whatever.

After that they're recycling the debt with credit offers with a view to saving money but in reality they're just building it up.

"Someone could end up bankrupt with £50,000 of debt but they've probably only spent £20,000 of that, the rest is interest and household expenditure.

"Now, because of the credit crunch, people can't borrow and I think the increase in the numbers declaring themselves bankrupt is down to people realising they've got a problem earlier than they otherwise would."

Christine Wall, debt advisor for Southampton Citizen's Advice Bureau, said: "We have noticed that the numbers have gone up quite considerably.

"People can't cope anymore and they are trying to find a solution. You pay what you can afford but it doesn't do anything to the debt and you think you are going to be paying it for 50 years, then going bankruptcy is an attractive proposition.