MONEY COMMENT
Bankruptcy On The Rise

By Jane Mack (TMFJane)
February 6, 2004

The number of people going bankrupt has risen by nearly 30% in the last year according to new figures published by the government. In the last quarter of 2003, 10,271 people went bankrupt - an increase of 12% on the previous quarter and 28.9% on the same period a year ago.

This is rather alarming. It's the highest number of bankrupts for a three-month period since 1993. Back then house prices had collapsed, unemployment was comparatively high and Britain was at the tail end of a long economic depression. None of those characteristics are present today so why is bankruptcy on the increase?

The answer must be excessive consumer borrowing and spending. Debt may be cheap at the moment but it only seems to be encouraging people to borrow even more. It's not surprising the Bank of England is trying to curb our enthusiasm by putting up interest rates.

The Consumer Credit Counselling Service says calls to their debt help line in January were up by 11% on the previous year so people are clearly beginning to seek help. But their research also indicates that nearly half of their existing clients struggled with debt problems for more than a year before doing so.

Some clearly left it too late but maybe the latest bankruptcy statistics will serve as a wake-up call for people who are starting to worry about their debts but haven't done anything about it yet. The key is to tackle the problem now so that you don't face the risk of becoming just another government statistic.

Find out how to Get Out Of Debt and contact the Consumer Credit Counselling Service if you need further support.