Loan debt is the result of reduced income

The rate at which many UK people are getting into debt is quite alarming. An increasing number of borrowers are lagging behind with their loan and credit card repayments and accumulating serious levels of loan arrears.

There are people who still don’t take their regular overspending seriously and continue to build up personal loan and credit card debts without thinking about their future inability to repay them. Others already struggle with repaying their debts.

According to the latest survey, the major reason given for unprecendented levels of personal loan and card debt is the reduced income because many employers try to reduce their company’s expenses by dismissing employees or by banning overtime and pay rises.

This data is based on a survey carried out among customers of debt management company Atlantic Financial Management. It revealed that out of the 4,600 people who have come to them regarding their personal loan and credit card debts since March 2010, 34% have admitted that repaying loan debts became an unbearable burden for them because of a loss of income.

23% of customers said that they owed money to several different lenders and used credit cards, which is why they were unable to juggle all the various loan repayments on a regular basis. Meanwhile, 12% said that they couldn’t make their loan repayments because of poor financial management.
 


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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.