|
BankruptcyNews
Junior Member
358 Posts |
 Posted - 15 May 2007 : 09:44:55
|
The mistakes that cause debt
Millions of UK consumers are getting themselves into deep financial hardship by making simple money mistakes that can be easily avoided.
According to research by credit report provider CreditExpert, one in 10 adults have considered declaring themselves bankrupt or taking out an Individual Voluntary Arrangement to help clear their debts. The company said many of those had made basic financial mistakes that compounded their initial overspending.
For example, 10% had taken out a credit card to pay off another credit card, while a further one in 10 had missed payments on credit cards, store cards or mortgages. Other common errors included taking out a lengthy consolidation loan with a high interest rate to clear existing debts.
At the start of Credit Awareness Week, which is designed to encourage consumers to get a better grasp of their financial affairs, the company added that a quarter of Brits admit to finding it hard to control their finances.
Recent Government figures showed personal insolvencies hit 30,075 in the three months to the end of March, up 24% on the same period a year ago.
These were made up of 6,842 bankruptcies, up 10% on a year ago, and 13,233 IVAs, a sharp 48% increase on the corresponding quarter in 2006. The recent rise in interest rates is expected to push more people towards debt problems.
CreditExpert managing director Jim Hodgkins, said: 'The number of people who admit to making basic financial mistakes and even considering 'quick fix' solutions like taking out an IVA is worrying.
'What this research seems to expose is a serious lack of understanding of the long-term consequences of these actions and how it can affect your credit-rating – ultimately impacting your financial future.'
According to the company's research eight out of 10 adults admit to overspending, with stress, arguments with partners or simply feeling low being the prime drivers.
Source: thisismoney.co.uk
See my Blogs:
http://bankruptcynews.blogs.bankruptcyhelp.org.uk |
|
The mistakes that cause debt
