The average Briton only regards themselves as being in serious debt when it reaches £14,416, a new survey has found.
The financial safety net report by Bright Grey found the level of "debt tolerance" is still high, although it is £1,421 less than it was in 2010 as consumers gradually realise the problems owing so much money can cause.
The level of indebtedness at which consumers could seek an individual voluntary arrangement is about £15,000, so many who wait until they are in debt by this sort of amount may wish to consider this option.
Although it works as a form of insolvency, it may lack the stigma of bankruptcy, not least because such a deal with creditors – which involves reduced payments over a period of five years or less – is confidential, whereas bankruptcy can be made public.
Proposition director at Bright Grey Roger Edwards said: "People are more wary about getting themselves into serious levels of personal debt, yet over £14,000 is still clearly a cause for concern."
The most recent figures from the Insolvency Service – covering the final quarter of 2011 – revealed there were 13,047 IVAs, compared to 8,626 individual bankruptcies.
Posted by Paul Thacker