UK debt levels 'lead to more bankruptcies'
Oct 05, 2006
Rising levels of debt mean that more than one million adults could be facing personal insolvency and be forced to declare themselves bankrupt or take out an Individual Voluntary Arrangement (IVA), a new report claims.
The survey from debt advice company Thomas Charles found that of the adults questioned with unsecured debts of £10,000 20 per cent or over were 'quite likely', 'very likely' or 'certain' to declare themselves bankrupt or take out an IVA, equating to 1.1 million adults in the UK.
This figure was considerably higher than the 13 per cent of respondents who were in this position when the same survey was run in March, the company said. The number of adults having problems repaying their debts 'every month', 'most months' or 'quite frequently' also rose from 21 per cent in March to 23 per cent this month, the survey found.
With high numbers of adults having unsecured debts of over £10,000, research indicates an high uptake of unsecured borrowing across all areas: credit cards, personal loans, student loans, hire purchase and overdrafts.
However, some experts may be critical that the survey was based on questioning a small sample of only 2,000 participants and that the figures are much larger than official Department of Trade and Industry statistics, which put the number of personal insolvencies at 20,000 for the last quarter of 2005
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