In statistics released by the Insolvency Service, a record 410 individual bankruptcies were filed in the Welsh city and the Vale area over the course of July and September. This figure is also some three times higher than the level of bankruptcies applied for in the same region some 15 years ago, during which time the Conservatives were in power. As a result, it appears that many residents in the region are developing ever greater difficulties in meeting repayments on home loans, credit cards and additional types of borrowing, in addition to other areas of financial demands such as utility bills and rent costs.

Commenting on the figures, Jenny Willott, Welsh Liberal Democrat MP for Cardiff Central and spokesperson for the party on youth affairs, claimed that the Labour party must do more to help people manage their finances effectively, which could help them to improve their ability to service secured personal loans and other demands on spending. She said: "The last quarter is the first time ever that more than 400 bankruptcies occurred in a single quarter in Cardiff and the Vale. Every year, people in Wales spend around 3.7 billion pounds just servicing the interest on their debt. Total national personal debt is now 164 per cent of people's disposable incomes."

Ms Willott went on to assert that the financial situation Cardiff and the Vale presently faces is "unsustainable". According to the MP, the "shockingly high" number of those struggling to make repayments on loans and other types of borrowing is due to "the growing debt time bomb" Labour is alleged to have allowed to build up over the past decade. As a result, she suggested that there needs to more stringent checks on the part of loan lenders when it comes to issuing credit as, "if it continues to remain unchecked, many more will be pushed over the edge into bankruptcy and many others will be facing endless financial misery servicing the interest on debts that they simply cannot pay off".

In addition, Ms Willott asserted that the government needs to implement "serious simplification" to its benefits system. By doing so the Welsh Liberal Democrat MP stated that this would reduce levels of error and fraud, as well as help to make sure those households on the lowest incomes are able to claim all the money that they are entitled to.

As a result of filing for bankruptcy after becoming unable to pay back loans, it is possible that consumers could find their financial file is damaged, which in turn could impair their access to cheap loans and other types of borrowing. However, for those who are confident that they will be in a position to meet demands for payment in the future, taking out a bad credit loan is one possible option. Such a form of borrowing could be particularly helpful for those in Wales struggling with money. Earlier this year, research conducted by BBC Wales showed levels of property repossessions in the region during the first half of 2007 stood at their highest rate for some eight years.