Advice on bankruptcy can help minority tackle ‘eye-watering’ personal debt

Published on September 19, 2014 by Crawfords Accounting

With the likelihood of an increase in the historically low Bank of England base rate seemingly a growing possibility, a minority of the British public could have legitimate cause for concern – and good reason to seek advice on bankruptcy in the months to come.

Economists in general expect a rate rise early in 2015, perhaps in February when the quarterly Inflation Report is published, and the Bank of England have their clearest picture of economic conditions.

But for half of the UK population – and 15% in particular – any rise in interest rates could create a whole new wave of debt problems, after several years of fairly cheap and stable borrowing costs.

Figure from R3, the Association of Business Recovery Professionals, reveal that only 47% of Britons actually carry any debt – but between them are sharing an “eye-watering” £1.5 trillion in outstanding balances.

But a significant minority of 15% have five or more debts to their name, and this figure rises to around 25% among those aged 25-44, putting this age group at particular risk of needing advice on bankruptcy if rates go up.

Stuart Frith, chair of R3’s Personal Insolvency Committee, said: “There are still plenty of people with potentially little room for financial manoeuvre.

“It wouldn’t take too much – an interest rate rise, for example – to turn a manageable situation into an unmanageable one.”

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