Over 70 people are being declared bankrupt every hour according to new statistics released by the Insolvency Service. The recent recession and credit crisis have provoked a dramatic upswing in the number of individual facing mounting debt problems in England and Wales. Such is the extent of the issue that we have seen an increase in the number of bankruptcy petitions of almost 300% in the last few years. Even more worrying, the Insolvency service is predicting a further increase when interest rates return to their normal levels.
For the first three months of 2010, the Insolvency Service puts the number of insolvencies in England and Wales at over 30,000. That’s almost a fifth up on the same time last year and the most insolvencies recorded in a quarter since records began in 1960. The total breaks down into about 18,000 bankruptcies and 12,000 Individual Voluntary Arrangement (IVAs). An IVA is a less severe debt solution than bankruptcy, while still being a legally binding agreement between you and your creditors. No debt solution is right for everyone but many find an IVA to be a favourable alternative to bankruptcy. To find out if that could be the case for your debt problem, talk to a specialist debt advisor like those at Harrington Brooks.
There is an argument for this dramatic increase in the number of bankruptcies, perhaps even the recession as a whole, being the result of a shift in consumer psychology. When once people saved up for big ticket items, the immediacy of today’s consumer environment now means that we buy now and worry about paying later. The easy availability of credit facilitates this attitude. Ultimately, the recession has put a stop to this activity but without a change in our overall attitude to credit, we could return to these spending habits.
This article was written on better money management and how it is central to a life free from bad debt. For those already facing the threat of severe bankruptcy, there are debt solutions on the market to suit their circumstances. Visit www.harringtonbrooks.co.uk for more information.