UK personal debt rises by £3bn over 12 month period
According to the latest figures, the total UK personal debt has risen by £3billion over the 12 months to the end of November and now stands at £1,459billion.
The research has been released by debt charity Credit Action and also reveals that average consumer borrowing via credit cards, motor and retail finance deals, overdrafts and unsecured personal loans has risen to £4,708 per average UK adult.
However, of those households in debt, the average sum of money owed has fallen from £21,875 to £18,784 (excluding mortgages) over the past year and, although the festive period is likely to have added to people’s debt problems, the arrival of the new year is expected to spark a rise in the number of people arranging methods to clear their financial problems once and for all.
Debt management plans and IVAs are two popular options for people wanting to organise their finances and become debt free.
Debt Management Plan
“This is an informal agreement between you and your creditors, negotiated on your behalf by a financial intermediary. Taking into consideration your income, outgoings and current levels of debt, you make just one affordable monthly payment that is distributed among your creditors."
“An Individual Voluntary Agreement (IVA) is a formal and legally-binding agreement between you and your creditors, in which you repay what you can afford over a fixed period of time (usually 60 months). If you have with debts of more than £15,000, then this may be the best way of becoming debt free in five years."
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According to Credit Action, as many as 1,000 people will seek a formal repayment plan to ease their debt problems every day in the UK.
The good news is that the rate at which debt is rising has slowed down. For instance, the figures show that the average household debt will increase by 13p every day, compared to £11.11 in January 2008.
However, with redundancy numbers still high, the risk of losing income and falling further into debt is still a major concern for people in the UK. The Citizen’s Advice Bureau deals with 9,300 debt-related enquiries every day in the UK as people fear consequences such as bankruptcy and the repossession of their property.
A property is repossessed every 11.2 minutes in the UK, while one person is made insolvent or bankrupt every 3.72 minutes.
Are you in debt? Is so why not contact us today and see if we can help you get debt free.