Insolvency levels plummet

Recent falls in unemployment and personal insolvencies has forced an IVA provider to issue a profits warning.

Fairpoint has said that it expects pre-tax profits to be "substantially lower than market expectations", but added that it was taking steps to cut its cost base.Fairpoint’s broker, Shore Capital, has cut its forecast for profits in half excluding amortisation and exceptional charges to £4 million.Chris Moat, Fairpoint chief executive, told the FT: “The supporting factors we expected in the marketplace have stalled, the pressures on IVA volumes were expected to recede towards the end of the year as unemployment figures started to rise along with interest rates. He had expected a stimulus from one or the other, but “we are seeing stability in both of them, and our expectations are now deferred.”IVA revenues accounted for most of total revenues last year, however the company has been diversifying through the acquisition of small debt management businesses and Moneyextra, which helps to fund cheaper suppliers for services such as utilities and insurance.Last year Fairpoint resumed its interim dividend, leading to a final payout of 4p, double that of 2009. In a statement to the stock exchange, Fairpoint said: We continue to drive growth through our debt management business segment supported by the consolidation opportunities presented by market conditions." "The board believes that the group's operating cash flow and existing bank facilities enable it to continue with its dividend policy and strategic diversification plans." "As a consequence we expect a strong recovery next year despite the prevailing market conditions. This is further supported by a significantly reduced dependence on IVAs as the benefits of our diversification strategy lead to an expected doubling of our non-IVA income streams in 2012."The company added that it was also working to cut other costs, which it expects to be more than £1 million lower than previous expectations.It expects the IVA market to decline by 11.5 per cent year-on-year, or 16.5 per cent against its previous expectations. It also expects the average fee income from IVAs to drop by 16 per cent.First-quarter statistics for UK insolvencies showed that the number of IVAs was down eight per cent, compared with Fairpoint’s expectation of a five per cent increase over the year.Following the announcement, the firm's shares lost a fifth of their value as they dropped by 20p to close the day at 68p.
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Rising debt levels affecting households

Over the past few years more and more people across the UK have been experiencing issues with debt, with many finding it difficult to cope with their high levels of debt. It has now reported that unsecured household debt levels have been increasing, which could lead to further problems for families that are already struggling with their finances.

Research has shown that over the past few months alone the level of unsecured household debt has increased. The research was carried out by insurance giant Aviva and formed part of its Family Finances Report. The research suggests that the level of household debt has increased by 9.66 percent since the beginning of this year reflecting an increase from £5,360 in January to £5,878 in May.

The research also shows that households with children are finding it extremely difficult to cope financially in the current challenging financial climate and many are now struggling to make ends meet. One official involved in the research said that there was a great deal of concern about the rising levels of personal debt. He said that many households were concerned about the future and a huge number of adults were worried about the cost of living continuing to soar over the next few months, as this would put further strain on their finances and make the situation even more difficult to cope with.

Industry experts have warned that any families that find themselves struggling to meet basic payments such as bills and mortgage or rent should seek advice as quickly as possible in order to ensure that their situations do not spiral out of control, which could easily happen if the cost of living continues to increase or the base interest rate increases leading to higher mortgage repayments.

Tags: problems, debt, credit card, cost, Mortgage, advice

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Posted in: affecting,households,levels,Rising

Rising debt levels affecting households

Over the past few years more and more people across the UK have been experiencing issues with debt, with many finding it difficult to cope with their high levels of debt. It has now reported that unsecured household debt levels have been increasing, which could lead to further problems for families that are already struggling with their finances.

Research has shown that over the past few months alone the level of unsecured household debt has increased. The research was carried out by insurance giant Aviva and formed part of its Family Finances Report. The research suggests that the level of household debt has increased by 9.66 percent since the beginning of this year reflecting an increase from £5,360 in January to £5,878 in May.

The research also shows that households with children are finding it extremely difficult to cope financially in the current challenging financial climate and many are now struggling to make ends meet. One official involved in the research said that there was a great deal of concern about the rising levels of personal debt. He said that many households were concerned about the future and a huge number of adults were worried about the cost of living continuing to soar over the next few months, as this would put further strain on their finances and make the situation even more difficult to cope with.

Industry experts have warned that any families that find themselves struggling to meet basic payments such as bills and mortgage or rent should seek advice as quickly as possible in order to ensure that their situations do not spiral out of control, which could easily happen if the cost of living continues to increase or the base interest rate increases leading to higher mortgage repayments.

Tags: problems, debt, credit card, cost, Mortgage, advice

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Rising debt levels affecting householdsRising cost of living could increase debt levelsPersonal debt levels increase in FebruaryConcerns over personal debt levels in LiverpoolJanuary debts causing problems for households

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Personal debt levels increase in February

According to recently released figures the level of personal debt in the UK increased for the month of February, with average household debt reaching almost £60,000. This shows an increase compared to the previous month. The figures were released by Credit Action and showed that the average household debt including mortgages showed a slight increase in February compared to January.

Many debt advisors and charities have already predicted that this will be a very challenging year in terms of the number of people struggling with high levels of debt. There is set to be continued demand for debt counselling services, which is already difficult to come by because of the sheer number of people that are seeking this sort of assistance at present. Many debt advisors were expecting to lose their jobs this spring due to government and funding cutbacks but the funding was found for another year.

There are many people that are already living in the red in terms of their overdrafts, loans, and credit cards, and with fears over rising unemployment the situation with regards to personal debt levels could continue to get worse. Whilst there are a number of possible options and solutions for those that do have debts that they are struggling to repay many are finding it difficult to even get the advice that they need.

Officials have urged consumers to ensure that if their situations change in a way that leaves them struggling to repay their debt they should take action sooner rather than later before the problem spirals out of control. There are a number of debt charities that can help those that need to get advice and assistance although the amount of time it takes to get to see an advisor can vary.

Tags: level, year, sheer number, government, consumer debt, February

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IVA numbers rise as personal insolvencies hit record levels

IVA’s accounted for a large proportion of the 132,142 people who were declared insolvent this year according to figures released today by The Insolvency Service.

50% of this figure declared bankrupt, however, 50% managed to to avoid this by signing onto an Individual Voluntary Arrangement (IVA) or a Debt Relief Order. The overall amount increased by 26% on last years figures to a record high.

IVA’s are a way to avoid bankruptcy and clear your debt in a more controlled way with less impact on your credit rating. The Debt People are IVA advice specialists and have help many people arrange an IVA every year.

The number of companies liquidated has fallen in the last three months of 2009 to 4,566. This is a fall of 1.7 per cent against the previous quarter and down 1.1 per cent year on year.

This shows that the country has signs of a recovery beginning, however, there are a large number of businesses who may have been saved by HM Revenue & Customs’s “time to pay” scheme, which has enabled struggling companies to defer more than £4 billion of PAYE tax and national insurance liabilities.

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Posted in: insolvencies,levels,numbers,personal,record