Debt doomsday 'is coming'

MONDAY, NOVEMBER 27, 2006

In a new report that was sent out today by Thomas Charles, the United Kingdom may be facing a debt situation where the number of adults in debt and dire financial conditions may equal and even surpass the number of adults who are debt free and do not have to worry about paying back loans or anything of that matter..

James Falla, director of debt solutions consultancy Thomas Charles, warned that this tipping point is not as far as many think.

The publication and report was based off of a survey where it was found that the number of adults with ìregular problems repaying their debtsî had risen 9% from a similar study that was conducted six months prior. In the first test only 1.8 million of those surveyed said they had debt problems, while on this latest survey, 2.5 million people reported having problems with debts.

The report also went on to say that as many a 1 in 5 adults in the United Kingdom have a debt of at least £10,000 and showed that women statistically get into more debt than men.

The report also showed that of those women who owe more than £10,000, 1 in 3 or 33%reported having regular difficulty making repayments, which is a 7% increase since April. As one can expect, due to this increased debt and trouble making repayments, the number of insolvencies, whether a full bankruptcy or an IVA, has also skyrocketed and it was found that somewhere around 1.4 million adults who have debts in excess of £10,000 are 'quite likely', 'likely' or 'certain' to file for bankruptcy in the near future.

James Falla said: ìWe are currently witnessing a correlation of increased borrowing alongside a massive decrease in the number of people coping with their debts. If action is not taken to curb borrowing trends in the UK, the situation is likely to spiral over the coming years.î