More People Struggling With Their Loans
Although the UK is officially out of recession, the aftermath continues to cause huge financial problems for many individuals who have fallen behind with their loan and credit card repayments and have now found themselves in a downhill spiral of unmanageable loan debt.
The latest figures from The Insolvency Service have shown that the problem for many individuals is far from over and that more and more people are struggling with their home owner loans, personal loans and other debts, with the number of people becoming insolvent seeing a significant increase in recent months.
Over the second three months of this year, 34,743 individuals were declared insolvent, which was a 5 per cent increase above the same period twelve months ago. This has raised new concerns that many people are walking a fine line with their finances and with managing their loan and card repayments particularly.
The figures show that the total number of bankruptcies stood at 14,982 for the second quarter of the year and had actually decreased by 20.6 per cent since the same time last year.
However, the number of Individual Voluntary Arrangements (IVA’s) has increased by 10.2 per cent to 13,466 and the number of Debt Relief Orders (DRO’s) has also increased to a total of 6,295.
The greater concern is that there are far more people struggling with their loan debts who have not yet sought any form of professional advice on the matter, which could only make the problem worse in coming months.
Steven Law of the Insolvency trade body R3 said “Unfortunately, the personal insolvency figures are just the tip of the “debt iceberg”. The true size of the UK’s debt problem remains hidden as the insolvency industry estimates there are an additional 500,000 people currently in informal debt management plans and close to a million people are struggling with their debts and have not yet sought help.”
