Concern as young bankrupts increase
BANKRUPTCIES in Suffolk have nearly doubled in the past 10 years, with young people accounting for much of the rise.Government figures released under the Freedom of Information Act show more than 5,000 people have been declared insolvent in the county since 1995/96.
BANKRUPTCIES in Suffolk have nearly doubled in the past 10 years, with young people accounting for much of the rise.
Government figures released under the Freedom of Information Act show more than 5,000 people have been declared insolvent in the county since 1995/96.
The yearly total rose by nearly 75% between 1995/96 and 2005/06, from 376 to 655, with the proportion of bankrupts aged between 18 and 29 more than doubling in the past six years.
Frances Walker, of debt charity Consumer Credit Counselling Service (CCCS), said much of the increase can be explained by growing financial pressures placed on young people.
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She said: “Bankruptcy figures are going up and will probably continue to rise.
“More young people are going bankrupt because of things like student loans. They are also less likely to have assets to lose by going bankrupt.”
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The rise in personal bankruptcies has been blamed on the recent credit boom, which has seen Britons collectively build up debts of more than £1trillion through mortgages, credit cards, loans and overdrafts.
Citizen's Advice Bureaus (CAB) in Suffolk are reporting an increase the number of cases involving debt.
In Felixstowe, the bureau expected to deal with debts totalling £2million for the last financial year, double the figure of five years ago.
Jane London, assistant manager of Felixstowe CAB, said: “We've had quite a significant increase in people asking about bankruptcy in the past year or so.
“There seems to have been an increase among all parts of the community, including the elderly, which is worrying.
“Bankruptcy has had a lot of publicity in recent years and people don't attach the same stigma to it as they once did.
“It's just another option in dealing with their debt. The pressure from creditors can be enormous and some people who go bankrupt say it's the best thing they ever did. But it's not right for everyone, especially if they own assets such as a house.”
The CCCS said the rising bankruptcy level could be interpreted as more people finding solutions to their debt problems, rather an indication of more people falling into difficulties.
New rules introduced in the Enterprise Act mean that individuals can be discharged from bankruptcy after just a year, so for many it has become an attractive way to clear debts.
However, even though an individual can be discharged from a bankruptcy after one year, it remains on record for six years, potentially affecting future employment options.
Mrs Walker, of CCCS, said: “We often recommend people go for bankruptcy but it really depends on the person and what's the best option for them.
“For around one in four of the people we see this is recommended as the best option.”
n Men are more likely than women to become bankrupt, although the proportion of female bankrupts is increasing.
n The average age of a bankrupt fell from 43 to 41 in the last four years.
n The proportion of younger bankrupts, aged between 18 and 29, has more than doubled.
n Female bankrupts tend to be younger than male bankrupts.
n The average level of debt of bankrupts has declined, from £48,740 to £46,587 in the last four years.