One person per minute declared bankrupt

One person per minute declared bankrupt

National money education charity Credit Action today revealed that one person is declared insolvent or bankrupt every 60 seconds during the working week.

Based on statistics gathered in the third quarter of 2011, the charity estimates that 331 people are made insolvent or bankrupt every working day and 101 properties are repossessed every day.

The current high level of unemployment is a major factor in tipping people into debt and between August and October 2011 1,764 people a day were made redundant.

The average household debt in November, excluding mortgages, fell slightly to £7,982 in November from £7,995 in October.

When mortgages are included, the average household debt increased slightly to £55,816 in November compared with £55,815 in October.

For the UK as a whole, personal debt totalled £1.451 trillion at the end of November 2011, with £173 million being paid daily in interest alone.

Michelle Highman, Credit Action’s chief executive, advised people experiencing financial difficulties to seek free advice from Citizens Advice or the Consumer Credit Counselling Service.

Last month the Insolvency Service reported a worrying trend for record numbers of young people to become insolvent.

Young people are increasingly turning to Debt Relief Orders, a type of insolvency only introduced in 2009, which wipes out debts after a year unless there has been a change in personal circumstances.

There is a fee of £90 and no need to go to court but although this seems like a quick and cheap solution, the holder of a Debt Relief Order will be unlikely to be able to secure a mortgage, credit card or loan for six years.

Debt Relief Orders are only available to people with debts of less than £15,000, who don’t own their own home and have less than £300 in savings or other assets.

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