UK Drowning in Debt, Is Debt Management a Way Out?
A report out from the UK Insurer AXA suggests the UK public is drowning in debt with 11.6 million people (25 per cent of the adult population) saying are under pressure financially with a momentous number, around one million three hundred thousand people, admitting their finances are entirely unmanageable.
AXA reported that mounting credit card bills are now putting just close to 3.8 million people under intense financial pressure and a further one million of UK borrowers are now struggling to keep up their repayments.
County Court Judgements CCJ’s issued to the personal consumer has increased to their highest level since the beginning of 2007 and half a million home owners with mortgages where threatened with repossession or court action.
The public interest Company that manages the register of judgements on behalf of the Lord Chancellor has reported that within England and Wales County Court Judgements rose by 17.4 per cent year on year to 223,519, its highest level since the beginning of 2007 and from the second quarter of 2008 this is a 25 per cent increase.
Individual insolvencies in England and Wales increased to 27,087 in the third quarter of 2008, up 8.8 per cent from 24,893 in the previous quarter.
Bankruptcies and Individual Voluntary Arrangements (IVAs) have increased 12 and 3 percent respectively.
The credit crunch could be blamed for the increase in corporate and personal insolvency throughout 2008, however, its patently obvious that further failures are going to be compounded by the recession throughout 2009.
Unfortunately the planned Simplified Individual Voluntary Arrangement SIVA, due out next year has been abandoned by the Insolvency Service
A simplified version of the IVA, for consumers with debts up to 75,000 and that would only require approval by a simple majority of creditors rather than the 75 per cent majority under normal IVAs, was due to be introduced in April 2009.
UK Home Owners unable to consolidate their debts using equity and are not wishing to go bankrupt have for the time being limited options between an IVA and a Debt Management Program.
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