Many consumers wanted to become insolvent last year
April 10, 2008
A recent report has shown that many consumers in the UK wanted to declare themselves bankrupt or become insolvent last year in order to get away from rising debts. According to the report thousands of people wanted to become insolvent last year, with many suffering financial problems due to rising living costs and mortgage repayments. The figures come from government reports and reflect the rising number of people trying to escape their debts through insolvency.
The figures showed that over the course of last year over fifty thousand people petitioned to declare themselves bankrupt without being advised to do so by creditors or industry officials. IVAs, or Individual Voluntary Arrangements, have become more popular over recent years due to increased awareness fuelled by an increase in the number of television advertisements enticing people to get rid of their debts in this way.
Rising costs such as energy, petrol, food, and mortgage repayments are set to see further increased in the number of people becoming insolvent over the course of this year according to recent reports, with some industry professionals estimating that around 120,000 people could become insolvent by the end of the year.
Insolvency figures have been rising for a number of years, and last year’s figure was actually around 50% higher than in 2004 and around 40% higher than in 2005. However, due to rises in insolvency levels the figure for last year was only 1% higher than in 2006, which is when many people began to experience financial problems due to the series of interest rate hikes that began in August of 2006.
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