Thousands Of Brits Go Bust
Filed under: Debt Conslidation Loans @ November 7th, 2008
In the last 12 months, 64,000 people have filed for bankruptcy, new figures have shown.
According to uSwitch, there was a 12 per cent increase in the number of bankruptcies during the second quarter of this year when compared to figures for the same period in 2007. While there were 24,893 bankruptcies during this period last year, in 2008 the figure rose to 27,087. In a daily breakdown, the price comparison site pointed out that each day, another 275 people will file for bankruptcy or insolvency, while 121 homes will be repossessed. It went on to claim that if the number of insolvencies continues to grow at its current rate, there will be at least 106,505 by the end of this year.
For those who are struggling with their finances during this difficult period, uSwitch advised seeking help from their debt advice centre, which can help people to manage their money better. Taking out a debt consolidation loan may also be an effective way to alleviate a growing financial burden. In applying for this type of loan, consumers could find they are able to spread repayment responsibilities over a longer period, leaving them with more disposable income each month.
And while the price comparison site warned that many people have already felt their finances stretched beyond manageability, thousands more may be on the brink of bankruptcy as personal debt levels soar. The group claimed total consumer debt is now approaching £1.5 trillion, a figure which grows by £1 million every eight minutes. As such, the group claimed that it comes as no surprise that many Britons are struggling.
Louise Bond, personal finance manager at price comparison and switching service uSwitch.com, commented: “At the moment, consumers are being hit from every angle with price hikes across all areas. This may be making many people feel that their finances are simply out of control. If people find themselves in financial difficulty the worst thing they can do is ignore the problem and hope it goes away. It wont. Banks have a duty to help people in financial hardship and free debt advice is readily available from organisations such as the Consumer Credit Counselling Service, National Debtline and Citizens Advice. I would strongly urge people to start taking action before they reach financial breaking point.”
She added that it was worrying that such a large number of people were entering into insolvency, either through individual voluntary arrangements or bankruptcy. Ms Bond advised that such measures should always be a last resort. For those who are looking for an alternative to bankruptcy, taking out a debt consolidation loan may prove an effective alternative.
Opting for this kind of loan may become necessary for a larger number of people as the economic storm clouds worsen. Last month, Bank of England governor Mervyn King warned that Britons should brace themselves for a recession as data showed that the economy contracted during the third quarter of this year. In the second quarter, there was zero positive growth.
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