High probability of increase in debt relief

According to the projection by Lovemoney.com, an increasing number of UK citizens will be resorting to debt relief advice in 2010.

Ed Bowsher, a representative of this company, said that since unemployment will probably be on the rise the next year, more people will see their loan debt spiraling out of control. He added that the borrowers affected by unemployment will be left with only two solutions – declaring bancruptcy or applying for Individual Voluntary Agreements.

Consequently, the banks are likely to be forced to write off huge amount of personal debt in 2011.

The prognosis of Ed Bowsher is supported by the data provided by the Insolvency Service, according to which the number of insolvencies in England and Wales increased by 5% in the Q2 of 2010 in comparison with that of the same period in 2009.

The Bank of England's Trends in Lending report also says that loan providers are reporting about an increased credit risk.


The cultural transformations that have made people accept life in debt have had a direct impact on the approach youngsters take to money matters, which could lead to negative consequences in the long run as many of the next generation would resort to IVAs to cope with serious financial issues.

When we put efforts into our work and get paid for this, we get an amazing feeling of satisfaction. Our hard hard work seems to have been remunerated financially. We go shopping and buy the items we need and the items we simply want.