There is likely to be an increase in personal insolvencies this year, a financial charity has predicted.
According to the Consumer Credit Counselling Service (CCCS), the majority of these will be bankruptcy rather than individual voluntary arrangements (IVAs), which is where a new formal arrangement of repaying debts is made between borrower and lender.
James Ketchell, spokesperson for CCCS, claimed that bankruptcy is one of a number of solutions for financial difficulties.
“Bankruptcy seems to have a very bad stigma attached to it, and people for that reason do not go through it,” he added.
Debt Help UK recently confirmed his comments, predicting that both IVAs and insolvencies would rise during 2008.
Chartered accountancy firm Grant Thornton recently estimated that 10,000 people will become insolvent every month this year, with 28,000 this quarter alone.
However a Guardian ICM poll found that 55 per cent of people were confident about the state of their personal finances at the end of December.
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