Bankruptcy at Lowest Level Since Financial Crisis Began

Online, May 20, 2013 (Newswire.com) - According to the latest financial statistics published by a professional firm of accountants, the rate of personal insolvency has fallen to its lowest level since the start of the financial crisis in 2008. This equates to a drop of around 16%, with full bankruptcies down by 25% in total.

The statistics also revealed that there is also an 8% fall in debt relief orders, which is an alternative to bankruptcy where people can apply to receive a DRO if they have debts of less than £15,000.

Many financial experts would agree that this is good news, especially teamed up with the revelation that the UK has just missed a triple dip recession, which many financial experts believed that we would not be able to avoid.

The statistics showed that although many people are feeling the pinch when it comes to the credit crisis, many families have been able to avoid great financial debt and are "muddling through" regardless.

The financial crisis has definitely taken its toll on the country though. Many families with varying levels of income are struggling because they have had to put up with a salary freeze as well as wage cuts, and many people have had their contracts altered from full-time to part-time arrangements. The cost of childcare has also gone up, along with the costs of utilities, insurance and so on.

Consequently, so-called middle-class families are particularly suffering since the credit crunch and have therefore been applying for financial solutions, such as loans, to help bridge the gap.

In many situations, an individual is able to manage their debts and the loan repayments successfully. However, there are problems with people who have taken out loans with very high interest rates or loans from unapproved and unprofessional lenders.

The problem with this is that you will not be protected by the financial ombudsman as much if you choose a backstreet lender because they are not insured or approved and are far more difficult to trace. Even with a professional lender, if you do not do your research and take out a loan with very high interest rates, the repayments on this loan can soon catch up on a person, and you can quickly feel engulfed in the debt that mounts up in interest over time.

Many financial experts suggest a debt management plan for those people that are struggling to meet the repayments to their lenders.

A debt adviser will be able to look at an individual's financial situation and analyse all of the incomings and outgoings that a person has to deal with on a monthly basis. They will also take into consideration any financial loans that you have taken out and the impact on your finances because of this.

source: http://www.clarkebell.com/personal-debt-advice/bankruptcy-counselling-service/