Debt solution company, ClearDebt, believes today’s government personal insolvency figures reflect a worsening in people’s ability to repay debt.
Commenting, ClearDebt CEO, David Mond, said:
The 6% increase in bankruptcies and debt relief orders between the end of 2011 and the beginning of 2012 indicates, we believe, a worsening in the circumstances of many indebted individuals and that some are giving up all hope of repaying their debts and electing to become insolvent instead. This is backed up by our experience, where ClearDebt has seen a small increase in the numbers of people in debt management plans where we have actually recommended bankruptcy instead, but our clients resist such advice.
Whilst, year on year, personal insolvencies are down, I don’t believe that fee-charging debt resolution companies, like ClearDebt, are seeing a fall in demand for our services. It’s significant that there were more Individual Voluntary Arrangements in the first quarter of 2012, than a year ago and that bankruptcies also increased, quarter on quarter.
It isn’t just new cases where things are changing though. As a company, we have seen a significant number of debt management plans where we have found that the client’s circumstances have worsened and we’ve had no choice but to recommend bankruptcy. As more people become unemployed so their ability to repay debt decreases. And a double-dip recession makes it more likely people will need to look for ways out of repaying debt, like bankruptcy. They in turn, will then be unable to play a part in increasing the consumer spending we are told is necessary to make the economy grow.
For further comment on the insolvency statistics please contact either:
Andrew Smith- Andrew.firstname.lastname@example.org, 0161 968 6825, 0791 240 7532
Sally Hardiman- Sally.email@example.com 0161 968 6815.