Millions are risking bankruptcy as homeowners are seeking out loans in order to make mortgage and rent payments. As the cost of living is continuing to rise and £30 billion worth of fixed rate mortgages are due to expire within the next month, it is likely that many will need to seek bankruptcy advice in order to regain control of their finances.
Research from MoneySupermarket.com reveals that 1.8 million households in the UK are getting themselves into more debt by taking out unsecured loans so that they can afford their rising mortgage or rent costs. A further 2.3 million people have increased their spending on credit cards as the credit crunch begins to pinch.
Tim Moss, head of loans and debt at the website, said: “It’s a very serious situation when you have people turning to a short-term solution to fund a long-term product. Having a roof over your head has to be your top priority but to be funding that with a loan you might default on or with a credit card that will eventually charge you interest of over 15% isn’t the solution in the long term.”