2006: The year of consumer bad debts

- LONDON, UK, January 05, 2007 - Last year witnessed the highest level of consumer bad debts, according to figures from KPMG. For the first time, more than a hundred thousand people became insolvent last year, reveals the figures.

Further data suggests that UK banks saw bad debts elevate to a gigantic sum of circa half a billion pounds in 2006. This is due in part to the amount of consumer debt people have falling into in recent years. Many battle to keep up with repayments on credit cards, loans, and additional forms of unsecured loans. Aggressive marketing campaigns may be a cause of that, with several companies promising consumers an easy way out of debt via IVAs and other debt management plans.

2006 saw the number of people opting for IVAs increase by a full hundred percent from the preceding year, with nearly forty five thousand people taking this route. An IVA involves a repayment arrangement with the creditors, where the borrower has to repay a part of the debt that he owes, with the remainder being written off after five years.

A KPMG spokesperson said: "Typically the sorts of debts we have seen being dealt with by with IVAs in 2006 are personal loans, credit card balances and other forms of "buy now, pay later" unsecured loans. Most of the money is borrowed to meet current expenditure - including lifestyle items such as holidays - rather than to acquire assets or to fund a business."

05.01.2007 - 22:07 Source: 24-7pressrelease.com | Read: 354 X