Insolvencies Through Loans And Debts See Record Levels
Although the UK is officially starting to see some signs of economic recovery, this is coming too late for a growing number of people who are struggling with their loan repayments and other debts, as the legacy of over lending and over borrowing finally catches up with some loan customers.
As more and more consumers continue to fall behind with their personal loan and credit card repayments, as well as more important things like their home owner loan or mortgage, the number of personal insolvencies continues to increase to new levels.
Last year saw the number of individuals who declared themselves insolvent through loan and card debts, reach an all time record high level since records were first kept, back n 1960, according to the latest figures from the Insolvency Service.
Although the number of insolvencies decreased towards the end of last year, overall there were 135,089 people who were declared insolvent during 2010.
Despite the fact that this figure only increased by 0.7 per cent on the previous year, to put the increase in some sort of perspective, the total number of insolvencies through loan and card debt has doubled over the course of the past five years.
As a growing number of individuals are struggling to stay on top of their loan debts, there has been a dramatic increase in the number of debt management firms, many of whom have been taking advantage of vulnerable consumers through high charges and fees.
The Consumer Credit Counselling Service (CCCS) has warned against people paying for loan debt advice, when they could receive advice for free.
Delroy Corinaldi of the CCCS said “Fee charging debt management companies must not be allowed to plug the gap left by the reduction in public funding for debt advice. It would compound the situation if over indebted households believed they had no alternative but to pay for debt advice.”
