Insolvency rise highlights need for good debt advice
on: November 24, 2008, 9:02 am
Release Author: Debt
Release Summary: Commenting on statistics from the Insolvency
Service showing a sharp rise in insolvencies, both over the last
quarter and over the past year, Debt Advisers Direct have said
that it is now more important than ever for people to get their
finances in order and tackle any debt problems as soon as possible.
Release Body: Commenting on new statistics showing an increase
in the number of personal insolvencies in the third quarter of
2008, Debt Advisers Direct (www.debtadvisersdirect.co.uk) have
said that this is further confirmation of the difficulties faced
by many British households due to rising inflation and worsening
economic conditions, and have emphasised the importance of good debt
advice as the economy faces a recession.
latest report from the Insolvency Service shows a rapid rise in
the numbers of people being declared insolvent. Between July and
September there were 27,087 personal insolvencies, an 8.8% increase
on the previous quarter. It was also 4.6% higher than the number
of insolvencies reported a year earlier.
falling in the second quarter of the year, bankruptcies were up
12.1% over the quarter. IVAs (Individual Voluntary Arrangements),
meanwhile, were up 3.3% over the quarter.
spokesperson for Debt Advisers Direct said: “Higher
costs of living and the credit crunch have put a lot of pressure
on British households’ finances this year, so we expected
to see a rise in personal insolvencies over the course of this
the extent of the rise in insolvencies shows the seriousness of
the problems we are facing – and highlights the need to
tackle debt problems early, before they become unmanageable..”
Insolvency Service report also showed that despite the quarterly
rise, IVAs were down by 3.1% compared with the same period last
year - with The Telegraph concluding that it may be becoming more
difficult to enter into an IVA.
are a few possible reasons why the number of IVAs may be lower
than this time last year,” the spokesperson commented. “It
may simply be that more people are taking the bankruptcy route,
perhaps because they are unaware that an IVA can avoid many of
the downsides of bankruptcy.
are usually considered a preferable alternative to bankruptcy.
People on IVAs do not lose control of their assets, unlike bankruptcy,
and they typically carry fewer restrictions.
rise in IVAs over the quarter shows that lenders still consider
it a valid means of reclaiming some of the money they are owed
– and it remains that if you are in significant debt, an
IVA can be a very useful way of getting debt-free.”
Debt Advisers Direct spokesperson was keen to
emphasise the importance of tackling debts before they grow unmanageable.
“For anyone struggling with debt, there are a number
of ways out. With a recession approaching, it’s important
that people do not feel powerless, and that they tackle the issue
are a number of debt solutions, such as debt consolidation and
debt management plans, that can help people to stop their debts
growing before they become unmanageable. We advise anyone with
debt problems to seek professional advice at the first sign of
Details: Debt Advisers Direct