370 Britons a day declared insolvent last year ~ Debt Managements and Consolidation

Wednesday 9th February 2011

Figures published by the Insolvency Service have revealed that over 135,000 people were declared insolvent in 2010, up 0.7 per cent on previous year and at its highest since 1960.

This means that 370 people a day were declared insolvent in each day of last year, and that the number of people who can’t keep up with their debts has doubled in the last five years.Commenting on these latest figures, Steve Law - president of the insolvency trade body R3 - said: “Unfortunately, for those that are struggling with debt the worst may not be over. Inflation, the rise in the cost of fuel and the increase in VAT means that the cost of living has risen at a time when most of us are experiencing pay freezes, pay cuts and - in some cases - unemployment. Worryingly, our research found that, in the last quarter of 2010, there was a four per cent jump in the number of businesses making redundancies."Meanwhile, Brian Johnson of insolvency firm HW Fisher warned when speaking to the Mirror that some creditors might be avoiding taking those in debt to court at the moment in an attempt to get as much money as possible from them: “Creditors are avoiding the nuclear option. They can spend money bankrupting people but they won’t get their money back. They are biding their time but as asset values rise, creditors may well make their move.”Bev Budsworth, managing director of multi-award winning firm The Debt Advisor, said: “While figures may be high, they also indicate that more people are gaining access to specialist debt advice. This is great news as it shows that confidence is returning to the debt management sector whose image has suffered recently with a number of firms ordered by the Office of Fair Trading (OFT) to clean up their acts. “Tenacious work over the last 18 months by organisations like the Debt Resolution Forum (DRF) and the Debt Management Standards Association (DEMSA) has helped to build trust in our industry and root out any ‘rogue traders’. As a result, non-lending solutions such as Individual Voluntary Arrangements and debt management plans are fit for purpose.“According to a survey by R3, the insolvency trade body, 38% of people struggle to make their finances stretch beyond the 19th of each month, with major concerns being credit cards and loans. If R3’s survey is representative, then this means there are around 18 million people who are just managing to hold on by their fingernails as interest rates remain low but even with low rates it’s really tough helping people who have no income.“Unfortunately, it’s only going to get tougher as the government’s austerity measures are only just beginning to be felt in people’s wallets. I doubt that when the coalition government came to power last May, it envisaged that its austerity measures would result in such a startling increase in the cost of living. These spiralling costs, coupled with worldwide commodity shortage and conflicts in the Middle East pushing up oil prices, means that the future doesn’t feel that bright.“We have at least begun to pay back our debts, some £24 billion in the last 12 months but again this is marred when you consider that banks have written off nearly £10 billion of our debt over the same period.” “It’s clear that the government will need to turn to the private sector for support for these individuals. By using the properly-accredited private sector, the government can help reduce the estimated £100 million-a-year burden on the taxpayer and provide much-needed support to our fragile economy.”
Manchester debt firm is liquidated owing creditors over £2.2m
Wednesday 11th August 2010

Bankrupt football legend probed by police over loan fraud
Monday 2nd August 2010

Mortgage broker ordered to repay £1.5m of client money used to pay off debts
Wednesday 14th July 2010

Barclays lifts lid on banking write-offs
Wednesday 20th February 2008

Send To Friend Print