Debt & Bankruptcy Issues in the UK

Recent figures show that the number of County Court Judgments (CCJs) has reached a level that is the higher than it has been in almost ten years. During the first three months of 2007, almost 250,000 CCJs were issued in England and Wales, an increase of 9.5 per cent over the same period a year ago. The total of 247,187 CCJs that were issued during the first quarter of this year is the highest since the summer of 1997. If you include business judgments, the total then becomes 296,841, an increase of 9.1 per cent.

According to the Registry Trust, lenders are relying more heavily on the court system in order to deal with unsecured debts. According to experts, an increase in the number of households who are struggling financially is also reflected in the data.

Approximately 70 per cent of consumer CCJs were the result of debts according to estimates that were compiled by the Registry Trust. Other organisations such as the HM Revenue & Customs, water firms, and the Driver and Vehicle Licensing Agency comprise the other thirty per cent of CCJs.

Debtors who fail to comply with the repayment schedule determined by the judgement are placed on a CCJ register for six years, thus making it harder to borrow money or buy a home.

The trend seems to be headed in the direction of more consumer judgements, and with this quarter's record, numbers, consumers who have unsecured debts are receiving the warning that their failure to pay will put their credit rating at risk and legal action is only a step away.

In the 1990s when the economy improved, judgments declined as lenders turned away from the courts.

The most recent data also showed a 12 per cent increase in the number of CCJ register searches.