Yes, that is an alarming statistic, indeed. 391 people everyday of the year will be declared insolvent or bankrupt in 2010, equivalent to 1 person every 51 seconds during the working day. This is a worryingly steep climb when you take into account that this figure was one in every 4.5 minutes in 2009, only a slight increase from 4.8 minutes in 2008. Source: http://www.creditaction.org.uk/debt-statistics.html
There has been much talk of late regarding the financial state of both individuals and businesses within the UK. And with stats to back up that talk, one that stands out and strikes terror into the current state of financial affairs is that of insolvency. It has unfortunately given plenty of ammunition to the merchants of gloom and doom, especially when you consider that there is no reason to believe that the number of recorded insolvencies will not continue to rise.
Actually, these figures only record formally registered insolvencies and don’t include those who have undertaken certain financial plans such as a DRO (Debt Relief Order) or IVAs (Individual Voluntary Arrangements).
So what is the origin of this alarming statistic? Well, in the current climate, people have been struggling to spend on necessities, never mind investing in luxury purchases. Homeowners are finding it tough to keep up with higher interest rates and resorting to credit cards. They then in turn have those to keep up with that those repayments also. Basically, far too many People have over-borrowed and are struggling to pay back their debt. Also, many of these people are business owners and are also feeling the pinch. If they’re not receiving the same level of incomings, how can they spend their normal allocated budget on promotion, staff etc.
One can be forgiven for feeling that there is no way out but the good news is that there is help available. The typical first port of call to resolve personal insolvency is a debt management plan. This is an informal, non legally binding agreement with creditors to reduce monthly debt repayments. Thousands of people turn to debt management plans each month to deal with their insolvency.
MoneySolve can offer free and confidential, expert advice. Call them now on freephone: 0800 040 7064.