Buckling Under Debt
One person in every five in England and Wales is said to be buckling under a mountain of debt, a trend helped along by rises in the cost of borrowing.
Insolvencies in England and Wales rose 66.3 percent in the 3 months leading up to June and court orders for home repossession jumped by a 5th.
Mark Sands, director of personal insolvency of financial consultants KPMG said:
Given that consumers are now facing higher fuel and heating costs as well as heftier council tax bills, we forecast that the stress on those in debt is likely to increase. This week’s rise in interest rates will place added pressure on those already on the brink.
With mortgage rates on the rise, homeowners are feeling the pressure meeting their financial obligations and thousands who have secured borrowings on their property are facing the prospect of loosing their homes due to house repossession orders.
Britain’s banks are blaming the change in the Bankruptcy Law, which they claim have caused a surge in bad debt charges in their financial year. They say the changes in The Enterprise Act 2002 made it easier for people to declare themselves bankrupt, which resulted in larger amounts of debts being written off.
Banks are also saying that people opting for Individual Voluntary Arrangements have played their part:
Individual voluntary arrangements, in particular, have had a huge impact on the numbers,” said Les Manning, a consultant at Deloitte. “IVA’s are the acceptable face of personal insolvency.
However, there has been a drop in the number of personal bankruptcies, so this does at least offer some ray of hope as more people are choosing the IVA route rather than going bankrupt.
Source: Reuters
Written by tani on August 11th, 2006
Filed Under Debt News | Trackback | Leave a Comment
Copyright © Payplan Ltd
2012 . Payplan Ltd. is part of 
Ltd. Payplan, Payplan Financial Freedom, Paylink, Totemic, the Payplan Logo and the Totemic Logo are all trademarks of Totemic Limited.