A recent survey suggests that it is going to cost the average British household a whopping £5,000 over the next year, just to maintain their current level of debt and not slide any closer to insolvency. So, this is simply the level of expenditure that we are facing in order to meet the interest added to our debt repayments. It doesn’t even begin to pay off the initial debt itself. Obviously, this is on top of the regular bills and expenditures that every household faces and, as we all know, there is always going to be a host of hidden outgoings that are almost impossible to plan for.
As we head into the festive season and everyone gets into the Christmas spirit, the odds are that we’ll all look for a bit more credit. After all, it is the season of goodwill and how better to show that than by spending money. As a result, economic predictions point towards an increase in the cost of borrowing. In order to service this desire to lavish gifts on friends and loved ones, consumers are expected to increase their debt by borrowing more money, at a greater rate of interest. This increased rate of interest is due to a limited supply of finance which is in turn imposed by tighter funding constraints for lenders. So, in accordance with the simple economics of supply and demand, credit will get more expensive.
Be sure to pay close attention to the small print associated with any credit agreement. Too often, people are sucked in by introductory rates that are simply too good to be true. Well, too good to last anyway. This can have a crippling effect on your finances and push you into debt. Even though it’s tempting to over extend at this time of year, as we’re bombarded with adverts and other temptations to spend, it’s important to stay debt savvy. You don’t want to start the New Year with the threat of impending bankruptcy.
This news comes in the wake of a record number of declared insolvencies. The most recent figures show that bankruptcies in England and Wales for the third quarter of 2009 reached 35,242 people. That’s an increase of almost 30% on the same period of last year. It is a sobering fact that currently, a staggering 11,000 people are being declared bankrupt in the United Kingdom each month. This is a number that’s set to go even higher in the wake of our Christmas spending. If you’re unsure as to the best course of action to tackle your specific debt problems, particularly before the festive spending kicks in, use the 15 second debt wizard at Harrington Brooks. They’ll be able to show you a debt solution to suit your circumstances and hopefully help you to avoid bankruptcy.