A million in UK close to insolvency

There are close to 8 million adults in the UK with unsecured debts of over £10,000. One in ten of them struggle to pay their debts every month. Many more are struggling "most months" or "quite frequently" to meet debt repayments.

Thirteen percent – just over a million said that their debt problems had become so severe that they were close to insolvency and "likely" to "certain" to either declare themselves bankrupt or take out an IVA (Individual Voluntary Arrangement). Another one in ten had sought debt advice from an Insolvency Practitioner.

It's a certainly a bleak picture in the UK, coming on top of government statistics released in May indicating that over 23,000 individuals in the UK were insolvent in the first quarter of 2006. In fact many experts believe that this year will see the largest number of insolvencies since records began.

According to the DTI figures most people declared themselves bankrupt, whilst an increasing minority opted to avoid bankruptcy by taking out an IVA. In an IVA, debtors hope to negotiate with their creditors to pay off a reduced sum of debt over a five year period.

For more details of the advantages and disadvantages of an IVA, contact Accuma for professional debt advice.