More people were unable to pay their debts in Ceredigion, Powys and Gwynedd 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 85 personal insolvencies in Ceredigion over 2022, up from 81 in 2021.

However, this was still lower than before the pandemic – in 2019, 104 insolvencies were registered in the area.

In Powys there were 231 personal insolvencies over 2022, up from 216 in 2021. In 2019, 230 insolvencies were registered in the area.

And there were 217 personal insolvencies in Gwynedd over 2022, up from 173 in 2021. In 2019, there were 213 insolvencies in the county.

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.”

However, he warned "the system that’s meant to help people is often making their situation worse".

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 Ceredigion, 71 IVAs were granted in 2022, along with two declarations of bankruptcy.

In Powys, 158 IVAs were granted and eight declarations of bankruptcy.

And in Gwynedd, 161 IVAs were granted in 2022, along with 16 declarations of bankruptcy.

In May 2021, the government launched its Debt Respite Scheme which saw people unable to pay debts become eligible for a "breathing space" and means creditors cannot pursue legal action against them for a set period while they sort their finances out.

Across England and Wales nearly 112,000 registrations have been made for a breathing space since the scheme launched – including 79 in Ceredigion, 177 in Powys and 170 in Gwynedd.

StepChange, a debt charity that administers breathing spaces, said the scheme has broadly been a success.

However, they would like to see the grace period extended, and added the scheme had teething problems early on.

A spokesperson for the Insolvency Service said: “Ensuring individuals in financial difficulty have access to effective solutions remains one of our top priorities, and that is why costs for administering personal insolvency procedures are kept to a minimum.”

“Last year, we published the Personal Insolvency Review call for evidence, which sought views on fees and funding specifically to determine whether changes are needed, and we will be publishing our findings in due course,” they added.