Personal insolvencies in the UK
The debt situation in the UK seems to be getting worse as the credit card age is catching up with many people in Britain. Many consumers have lived on their credit cards for the last few years and now they find themselves making payments they can barely afford and little expendable income.
Personal insolvencies in England seem to be pointing to a divide between the North and the South of England, according to figures last year. New data released from the Insolvency Service shows that bankruptcies and individual voluntary arrangements (IVA’s) were at the highest rate in the North East of England with the lowest level being in London.
Bankruptcy – The oldest way of getting rid of unmanageable debt. Bankruptcy is usually over after one year, but you are likely to lose your house and any other assets you may have in order to pay your creditors
Individual voluntary arrangement (IVA) - An IVA is a deal between you and your creditors to pay your debts. Less stigma, less chance of losing your home, but involves paying a percentage of your debts over a number of years
Debt Relief Orders – The were first brought into force in 2009 and allow people with debts of less than £15,000 and little assets to write off debts without having to declare themselves bankrupt.
Due to people finding themselves out of work with unmanageable credit card bills, personal insolvency’s are currently at record highs.
The reason that the North East of England has been hit the hardest is partly due to the fact that it had a higher than average unemployment rate and one of the region’s main source of jobs: the construction industry, was hit dramatically during the recent economic downturn.
These figures that were recently released show the statistic’s for 2009 however if recent data is to believed, then these figures are due to become much worse. The number of people being declared insolvent have been increasing each quarter with that trend expected to continue.
There was a 17.9% increase in personal insolvencies compared with the same period a year earlier.
The advice from the United Kingdoms debt charities is to get help as soon as they realise they are facing unmanageable monthly payments. They continue to say that you should not ignore your debts as many people in the UK seem to do. It can be tempting to ignore the calls and throw the letters in the bin but this is not a long term solution. Only be confronting the debt can you start to resolve it.
amifiations “should be relatively neutral”.
