The debt problems of the UK have soared to their highest ever level, increasing the total outstanding UK government debt to £799bn.
The UK government debt has never been this high since records began in 1974, and the recent rise takes the total amount outstanding to an equivalent of 56.6% of UK Gross Domestic Product (GDP).
The country’s debt management has taken a turn for the worst as the Government tries to fend off the recession, but the debt problems have now got worse as tax incomes have declined.
Personal debt levels have also been subject to increased scrutiny, as growing redundancies and unemployment levels have strained the finances of those overstretched households.
Debt advice organisations have reported that the finances of customers seeking their debt help have mirrored the debt problems that the Government now faces.
Ivan Cooper, Chairman of leading debt management firm Chiltern said: “We often hear from people who, like the government, are spending over 50 per cent of their income to service outstanding unsecured balances.
“This puts a huge strain on household finances and can mean that debt management issues become increasingly difficult to keep on top of.
“Often all that is needed is some impartial debt advice, as debt problems can usually be relieved if dealt with early by a professional.”
Reputable debt advice organisations, like The Debt People, Hamilton Locke and Chiltern, can provide impartial debt help and suggest a number of ways to get out of debt.
These may include simple budgeting advice or a professional solution being recommended. Professional solutions range from Debt Management Plans (DMPs) and consolidation loans, to Individual Voluntary Arrangements (IVAs) and Trust Deeds amongst others.
A Debt Management Plan (DMP) enables multiple unsecured balances to be repaid with a single monthly payment. Payments towards the separate debts are then rescheduled over a longer period of time. This makes finances simpler and also more affordable. Debt management plans also allow changes to be made according to your financial situation – so monthly payments can be reduced if you receive a lower wage than previously or increased to repay off balances faster if you get a promotion or salary increase.
An Individual Voluntary Arrangement (IVA) works in a similar way to a Debt Management Plan but is repaid over a fixed period of time – usually over five years. After this time, all remaining unsecured balances are written-off and you walk away free from your commitments. An IVA requires a qualified Insolvency Practitioner to provide IVA advice and to draft your proposal. This legally binding agreement with creditors, prevents the people you owe money to from changing their payment demands.
For immediate debt advice, or for more information on Debt management Plans and IVAs, please call the number at the top of this page. The debt and IVA advice you receive is free, and any debt management solutions that may be recommended are tailored to your specific needs.
