Loan News Record Bankruptcies Amass In Britain’s Debt ‘mountain’
03 January 2007
Record numbers of Britons declared themselves bankrupt in 2006, a study from uSwitch.com has revealed.
As debt levels reached a historic high, nudging £1.3 billion, the independent price comparison website warned they had risen by 217 per cent since 13 years ago.
Researchers found average household debt, including mortgages, stands at £51,343, and as many as 5,300 people seek debt advice daily through advice group Credit Action.
As 2006 wound to a close, statistics show that one person went bankrupt every minute – a 66 per cent increase on the final quarter of 2005.
Nick White, director of personal finance at uSwitch.com, underlined “the need to educate consumers about effective debt management” to tackle their “mountain” of debt.
Consumers should beware taking out a loan to cover their debt difficulties, he urged – debt consolidation loans can help them reduce monthly payments and overcome debt bit by bit only if they also plan ahead and regiment spending.
Last week, a report from KPMG found creditors wrote off a record amount of bad debt in 2006 (£1.4 billion) through Individual Voluntary Arrangements as more than 100,000 people became insolvent.