Rising debt pushes up distress levels

Debt repayment difficulties for those coping on a low income is now becoming a very worrying issue for many, and for an increasing number of reasons: the many recent interest rate hikes together with the recent 'sub prime' liquidity scare, and current frustration experienced by those wanting debt resolution all combine to push more and more people living on fixed incomes towards distressing financial situations.

With more than one in five people in the UK - a total of 13 million and rising - access to debt management, debt consolidation and individual voluntary arrangement (IVA), Scotland IVA information is crucial and still no easier to access. A feeling crystallised recently by Chris Holmes, chairman of the Debt Resolution Forum (DRF - which represents 28 of the UK's debt resolution firms), who warned that "banks and credit card companies have been setting out to frustrate effective debt resolution in the UK at almost any cost."

For those who suggest the numbers accessing IVAs has seen recent improvement, Holmes adds a further insight: "IVAs fell by 15% in the second quarter of 2007 not because demand is faltering but, we believe, because the conditions imposed on IVAs by the banks and credit card companies are leading to hundreds of clients, every week, being advised that an IVA is no longer possible for them," - a fact borne out by The Debt Counsellors who noted that IVAs have been growing considerably year-on-year.

Inflation is now approaching its highest level in 14 years. The broader measure of inflation, the Retail Prices Index, which includes mortgage payments among other things, is running higher at 4.4%; and according to a recent report by an insurance company, pensioner inflation is actually running at around 9%, (source: Prudential) driven by rising food prices. Unmanaged debt is not a problem that can be ignored for very long.

Source: eMediaWire.com