And from today's Telegraph.............
Record numbers go bust in 'live now' Britain
By Rosie Murray-West (Filed: 04/02/2006)
Vincent Cable: the figures are 'a cause for grave concern' There has also been a sharp rise in repossessions as people failed to meet their mortgage repayments.
Almost 20,500 people became insolvent in the final quarter of last year, a 57 percent increase on the corresponding period in 2004. Of those, 13,500 filed for bankruptcy, while the rest opted for Individual Voluntary Arrangements to try to sort out their problems.
Debt experts blamed the problem on credit card companies and an instant gratification culture among the young.
Mike Gerrard, a personal insolvency expert at the accountancy firm Grant Thornton, described the increase in personal insolvency as "jaw-dropping".
He said that, although there were many reasons for getting into debt, including family
or employment crises, the main problem was the "now culture".
"People of all ages are expecting things now and no longer wanting to save to buy them," he said. "That is generating the higher volumes of insolvencies we are seeing."
Peter Tutton, of the Citizens Advice Bureau, said the problem affected all ages and income groups.
"We see pensioners, young people - all across the board," he said. Ten years ago they would have debt problems to do with council tax and rent arrears but now it is mostly credit cards, personal loans and hire purchase."
Figures from the Student Loans Company showed recently that many students were declaring themselves bankrupt to escape repayments.
Although a loophole has been closed to stop students from declaring themselves bankrupt on leaving university and ignoring their debts, there is nothing to stop a student paying off his or her loan with a credit card then walking away debt free after filing for bankruptcy.
Age Concern issued a recent warning that many elderly people were becoming debt-ridden as they struggled with heating bills and maintenance on their houses.
Home repossessions rose to 10,250 last year, up 70 per cent on 2004.
The Council of Mortgage Lenders said that this was an extremely low figure historically and the third lowest since 1983. But Vincent Cable, the Liberal Democrats' Treasury spokesman, said the figures were "a cause for grave concern".
There has also been a rise in the number of mortgages that are more than 12 months in arrears, up 23 per cent last year to 13,820.
The Association of Business Recovery Professionals, R3, called for more teaching in schools about financial matters and better adult education to help to stem the rising tide of debt.
Ron Robinson, the president of R3, said: "These figures confirm our members' experiences. Personal debt is out of control in this country. Credit card companies are lending too much to people who can never afford to repay their borrowings.
"If companies cannot lend more sensibly, it is up to the Government to help people to manage their debts better themselves. We can make a start in schools but we also need to find a way to help and educate adults."
The Consumer Credit Counselling Service said there was a positive side to the growing number of people filing for bankruptcy.
"The figures are more likely to mean that more people are finding solutions than that more people are getting into trouble," a spokesman said.
The Enterprise Act of April 2004 dramatically lessened the impact of bankruptcy. People are now discharged an average of eight months after being declared bankrupt, instead of three years later.
The Consumer Credit Counselling Service said that had affected the number of people choosing to file. A spokesman also said that attitudes in society had shifted and that bankruptcy no longer carried such a great stigma.
"Many see bankruptcy as a new lease of life," she said.
The popularity of Individual Voluntary Arrangements has soared. They are a less severe form of debt management and allow people to keep their homes and businesses.
The arrangement usually lasts for five years, during which an insolvency practitioner will take the surplus of the client's salary and distribute it among creditors on a pro-rata basis. When it expires, the rest of the debt is written off.
************************************************************************************************************A worrying attitude from the Consumer Credit Counselling Service don't you think ?