Rising Debt Distress in the UK

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August 2007 News from The Debt Counsellors - With inflation at a 14 year high and debt resolution frustratingly difficult to secure, debt distress in on the rise.

IVAs fell by 15% in the second quarter of 2007 not because demand is faltering but, we believe, because the conditions imposed on IVAs by the banks and credit card companies are leading to hundreds of clients, every week, being advised that an IVA is no longer possible for them

Debt repayment difficulty for those coping on a low income, so often a significant challenge, is now becoming a very worrying issue for many and for an increasing number of reasons: the many recent interest rate hikes together with the recent 'sub prime' liquidity scare, and current frustration experienced by those wanting debt resolution all combine to push more and more people living on fixed incomes towards distressing financial situations.

With more that one in five people in th uk - a total of 13 Million and rising a high figure by European standards, access to debt management, debt consolidation and IVA (individual Voluntary Arrangement), Scotland IVA information is crucial and still no easier to access. A feeling crystallised recently Chris Holmes, chairman of the Debt Resolution Forum (DRF), representing 28 of the UK's debt resolution firms, who warned that "banks and credit card companies have been setting out to frustrate effective debt resolution in the UK at almost any cost".

For those who suggest the numbers accessing IVas has seen recent improvement, DRF chairman Chris Holmes adds a further insight: "IVAs fell by 15% in the second quarter of 2007 not because demand is faltering but, we believe, because the conditions imposed on IVAs by the banks and credit card companies are leading to hundreds of clients, every week, being advised that an IVA is no longer possible for them," A fact borne out by The Debt Counsellors who noted that IVAs have been growing considerably year-on-year.

Inflation is now approaching its highest level in 14 years. The broader measure of inflation, the Retail Prices Index, which includes mortgage payments among other things, is running higher at 4.4%, and according to a slightly alarming recent report by an insurance company, pensioner inflation is actually running at around 9%, (source: Prudential) driven by rising food prices. Unmanaged debt is not a problem that can be ignored for very long.

The Debt Counsellors offer free, confidential advice on all types of personal debt.

To be Debt Free in 36-60 months, please call: 0800 018 6018 or visit http://www.debtcounsellors.co.uk

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Kevin Aston
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