Posts Tagged 'personal debt'

Figures released by Credit Action today reveal that a property is repossessed in the UK every 11.2 minutes. That’s 128 individuals or families losing their home every single day in the UK as a result of financial difficulties and a subsequent inability to pay a mortgage. Repossessions under certain circumstances are, unfortunately, unavoidable owing to the fact that secured debts (such as mortgages) cannot be taken care of with a debt management plan, IVA or similar debt restructuring plan.

The other statistics released give a good indication as to the possible cause of this issue, with over 2000 people every single day finding themselves being made redundant in the UK and over 9000 contacting the Citizens Advice Bureau in regard to debt. 1000 seek some sort of formal debt restructuring plan every single day.

The figures are pretty depressing entering the New Year, but there’s good news too. The rise in the rate of unemployment, though it does continue, is slowing down. The recession is expected to have formally ended during the final quarter of 2009 (something that will hopefully be confirmed soon) and the economy is expected to begin a very slow recovery. While it will be a long time before we are enjoying the financial boom of the early 2000s, things are certainly looking up.

This, however, will be little consolation for those whose homes have been repossessed as a result of personal debt or financial difficulties.

The New Year is traditionally a period that sees higher than usual debt defaults. This is largely attributed to overspending across the festive season. However, credit agency Experian is warning of particularly high defaults in January 2010.

The first 9 months of 2009 saw 771000 people lose their jobs. That is a massive 94% increase on the same period of 2008. Add this to the record insolvency statistics also announced this year and it seems we have all the ingredients for some disastrous debt issues as the new year arrives.

What doesn’t help the situation is that debt management companies, loans companies and even banks increase their marketing in the run up to Christmas, seizing the opportunity as more consumers look to find some extra cash to see them through the season. Calls to households from lenders offering extra cash have risen 50% over the last month, according to the Call Prevention Registry and the Citizens Advice Bureau reports dealing with over 9000 calls every single day from those seeking advice about debt problems.

Experts are advising consumers to approach debt management carefully, to budget conservatively and to avoid high interest credit cards as a means of supplementing Christmas spending. However, during what is largely a commercial and consumer driven holiday, it seems unlikely that we’ll entirely avoid the debt associated with it.