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BankruptcyNews
Junior Member
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 Posted - 29 June 2007 : 09:39:16
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Debt profile in the UK
Debt profile in the UKA record number of people were unable to repay their debts last year, with over 100,000 people going bust. The consumer credit company Experian produced a number of reports of the debt map of Britain.
The declaration of bankruptcy is usually seen as a last resort taken by those who can no longer afford to repay their debts. In most cases it will mean the loss of all an individual's major assets.
The UK map of the top ten towns for bankruptcies shows that most of them are on the south and, particularly in the south west. Top of the list is Torquay, with Plymouth third, then Bournemouth, Eastbourne and Newton Abbot. Seventh is Barnstaple, then Hastings, Weymouth and Truro. The only exception to the south / south west rule is Kingston upon Hull, which is in second place. Why should there be such a regional bias? Explanations vary, but it may be that the high number of seasonal businesses and sole traders in the region affects the overall figures. The lowest region for bankruptcy is Northern Ireland. Ratings are based on per capita bankruptcy in towns across the UK.
The UK map of the top ten towns for Individual Voluntary Arrangements (IVAs) reads like a route map for the M4, with only three exceptions. Top of the list is Aldershot, followed by Andover, Newbury and Crawley (M23). After that come Windsor, Swindon and Basingstoke and in tenth place is Chippenham. At eight place is Stevenage and the biggest exception is Darlington in ninth place. The numbers of IVAs have grown a lot in recent years, and have nearly caught up with the number of bankruptcies. However, this is not an easy option and can affect your credit report for six years. An IVA may also make it harder to gain credit in the future. Why should the M4 corridor be an IVA hotspot? It may be that the targeted advertising of IVAs in that area has been a factor. Ratings are based on per capita IVAs in towns and IVAs do not apply in Scotland. With an IVA, the debtor - normally through an intermediary - reaches an arrangement with creditors to pay back part of what is owed. IVA debtors do not lose their homes, but they can find that they have to live to a very tight budget until their debts are repaid, while their credit record is also damaged.
Credit agency Experian also produced a measure for Financial stress; being a measure used to define an individual's "potential to become over-stretched and struggle with further payments". This is much less clearly-defined picture than the other two views. Top of the list in this category is Manchester, followed by Glasgow and Nottingham. In fourth place is Knowsley (Merseyside), then Middlesbrough and Kingston upon Hull. At seventh position is Liverpool, then three from London: Southwark, Tower Hamlets and Hackney. These do include major urban centres where the other lists, in the main, did not. These potential troubled areas are highlighted by Experian after analysis of the number of personal loans and credit cards that people take out, and how regularly payments are made on their debt. It also includes data from Mori's Financial Services Survey together with publicly available information on bad debts and County Court Judgements.
In Glasgow the number of Consumer Credit counsellors was doubled last year to cope with demand from people with debt troubles. Factors causing problems are the young being stretched, property prices out of reach, and second mortgages being used to cope with credit card and loan debt.
Further study shows that older men have the worst problems with debt. Research by the Consumer Credit Counselling Service (CCCS) and Citizens Advice have seen an increase in requests for services and advice. This is partly due to better availability and awareness of services, but there has been a 15% increase in debt cases in the last year.
The number of elderly people asking for help has risen, with over 60s males owing an average of £36,940, and the average debt to monthly income ratio for this group was 36:1.
Including females the age group with the biggest debt problems was between 40 and 59. Average income was good at £1,453, but average debts were £35,000.
But it is not just the older age groups who are increasing their need for advice. Single mothers between 40 and 59 on low incomes have also increased their requests for assistance. Interestingly, there was sent to be a big increase in the number of request from people in Yorkshire over the age of 60.
According to figures from the Bank of England, In the UK, the total amount of debt in 2006 rose by 9% to reach £213bn.
Cases are not isolated as nearly all financial stress indicators went up in 2006, with record increase in bankruptcies, and IVAs. In addition the number of property repossessions by mortgage lenders was also on the increase, reaching levels not see since the last recession in the 1990s.
Source: thriftyscot.co.uk
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Debt profile in the UK
