Debt victim numbers hit record high
|
| (C) Rex Pictures |
Record numbers of us are going bust – official figures show annual bankruptcy figures soared by over 50% during 2006. This money misery is taking its toll on our homes, health and relationships too. Make sure you don’t become a victim, with our seven-step plan
Britain is fast becoming swept up in debt misery – the latest figures from the Department of Trade and Industry (DTI) show that nearly 30,000 people became bankrupt or insolvent in the last three months of 2006 alone.
Across the year, the annual number of debt victims topped 100,000 for the first time ever – a 59% increase on 2005, when 67,000 people went bust. This huge surge has been largely fuelled by a sharp rise in people taking out Individual Voluntary Arrangements (IVAs).
dealing with debt
Unlike bankruptcy, where people lose most of their assets, IVAs allow hard-up borrowers to come to an agreement with their creditors to repay at least part of what they owe. Yet experts have expressed concern that many people are being persuaded to sign IVAs without proper advice – and warn that the number of victims is likely to keep growing.
“We dealt with 1.4 million debt problems in the last financial year,” notes Citizens Advice specialist Sue Edwards. “There are thousands of people who have substantial debt and will never be able to pay it off. For many people, bankruptcy may be the only realistic option.”
Side effects
Other figures also highlight just how bad our money worries have become. Figures from industry body the Council of Mortgage Lenders (CML) show that the number of home repossessions rose by 65% last year, as increasing numbers of us struggled to keep pace with our monthly mortgage repayments. And these financial pressures are estimated to have forced over one million couples to split up, according to a recent survey.
With interest rates on the climb – pushing up the cost of borrowing – and the cost of living rising, it’s never been more important to take control of your finances. We show you how with our seven-step program.
