A record number of UK consumers became insolvent during the second quarter of 2006, according to recent figures, a trend the Citizens' Advice Bureau (CAB) blames on what it calls "irresponsible lending".
The figure of 26,000 insolvencies during the period of April to June 2006 represented a 66 per cent year-on-year rise in bankruptcies and CAB said lenders had to take some responsibility for the rising levels of severe debt.
Borrowing through loans is not necessarily a bad thing and a carefully managed debt can be a positive aspect of someone's financial record but a CAB spokesperson said lenders had not been "wholly responsible in their lending practices".
"We have evidence which shows that people are loaned money very late in their life and very early, which are of course very vulnerable times in a person's financial life," the spokesperson stated.
"There is clear evidence of irresponsible lending across the board. In some cases people do borrow more than they can afford, but the key element for people on low incomes is that they are given enough information to make an informed decision."
The CAB said that if information was clearer and more widely dispensed, bad debts could be cut down significantly.To read more about loans, click here.
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