Bankruptcy is a ‘last resort’
People struggling to repay debts should only consider bankruptcy as a last resort, a money education charity said today.
Figures released by the Insolvency Service showed that there were more than 65,000 individual bankruptcies in England and Wales during the 12 months to the end of June, as people struggled to cope with the cost of loans, mortgages and credit card borrowing.
Chris Tapp, deputy director of Credit Action, said there are plenty of alternatives for people to consider before looking into bankruptcy, even though banks are becoming increasingly reluctant to agree to Individual Voluntary Agreements (IVAs).
One option is a debt management plan, he explained, which would allow a borrower to make lower monthly repayments without affecting their credit rating adversely.
"It's a real indicator that the person is making a real effort to sort out their finances, but at the same time pay back what they owe," said Mr Tapp.
He added that people who opt for bankruptcy may have difficulty obtaining credit in the future, as well as finding their employment prospects damaged.
Personal finance website MoneyExpert.com recently suggested that consolidation loans and loans secured against property can help borrowers to keep their debts under control.
© Adfero LtdYou can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.