Latest Debt News
Bankruptcy levels to reach new high
16/12/2005 17:17:00
The number of people suffering from bankruptcy is likely to reach record levels in the first quarter of 2006, according to estimates from accountants Grant Thornton.
The firm believes nearly 20,000 people will have personal insolvencies in the first three months of the new year, the highest since records were first kept 45 years ago.
Debt from credit cards and store cards over the Christmas period will account for 6,500 of these people.
Mike Gerrard, head of Grant Thornton's personal insolvency practice, explained: "Many people will be funding their Christmas shopping sprees on their credit cards.
"A little overspend will not break the bank for most, but for those who are already financially overstretched, spending that little bit more during the festivities may represent the straw that breaks the camel's back, plunging them further into debt and quite possibly towards bankruptcy."
Mr Gerrard also expects the number of Individual Voluntary Arrangements (IVAs) to increase further next year, as more people in debt look for a constructive solution to their problems.
The third quarter of 2005 saw a 31 per cent increase in IVAs and this could well reach 35 per cent by the end of the first quarter next year.
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