Personal Insolvencies Hit Record Levels as More UK Citizens Seek Debt Management Advice

CHORLEY, UNITED KINGDOM, Nov 09 (MARKET WIRE) --
The latest figures released on National Insolvency report a record number
of insolvencies. Director of Consumer Debt Advice Service, ClearStart
Nigel Stockton has responded to the latest National Insolvency Statistics
and has provided an insight into the potential debt management trends in
future for UK citizens.

"Today's National Insolvency Statistics have showed an increase of 28.2%
in personal insolvencies compared to the same quarter last year, with
figures hitting record levels as consumers continue to struggle to
service their debts.

"The latest figures have shown year on year growth in all types of
insolvency solutions, but most worrying with bankruptcies/debt relief
orders being the fastest areas of growth.

"Whilst bankruptcy may sound like an easy option for consumers, in that
quite often debts are considered satisfied within twelve months, it can
limit employment prospects, ruling out roles in parts of the financial
services sector; the forces and directorships. Additionally, there is a
stigma of bankruptcy which can continue for 6 years and financial
exclusion is a certainty with access to credit denied.

"The introduction of Debt Relief Orders in April this year has fuelled
the increase in the number of lower level bankruptcies, as it now allows
consumers who have under Pounds Sterling 15,000 of unsecured debt to file
for bankruptcy using a low cost but fast track process.

"Perhaps of more concern in the longer term, however, is the fact that as
bankruptcy grows in popularity it will provoke more lenders to become
increasingly risk averse to lending to higher risk consumers and interest
rates charges will continue to be disconnected from bank base rates as
lenders build in the cost of non repayment loans into their pricing.

"For over 40% of our callers, the main driver for people falling into
debt is when they face a period of temporary unemployment, which very
quickly builds up debt to unmanageable levels. This is further compounded
by them returning to work in a much lower paid job, which can have a
dramatic effect on household budgets.

"We fully expect this trend to continue, especially if interest rates
start to rise. According to Mintel, 32% of consumers are just managing
despite interest rates being at historic lows, so a small rise in
interest rates could push many people into severe financial difficulties.

"At ClearStart, we believe that consumers struggling with debt should
seek advice early to ensure they can access the least severe solution.
While these solutions will mean that they need to make all or partial
repayment of their debt, they will also help them to keep their options
open.

"We believe that advice should go beyond finding a debt solution and we
also ensure that consumers are claiming all benefits they are entitled
to, which can often make a real difference to household budgets and that
they are paying no more than needed on the essentials such as energy and
insurances."

ClearStart aims to help solve debt problems rather than allowing them to
perpetuate. Recommendations are based on the individual situation and all
advice is free. The website www.ClearStart.org, offers practical advice
for people and provides an online application form or there is a
ClearStart freephone telephone helpline available on 0800 988 9345.

Contacts:
ClearStart
Steve Milburn
PR Officer
Direct line: 0845 296 0182
smilburn@fairpoint.co.uk

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