Nearly one third of all the personal insolvencies declared during the month of March are the result of financial difficulties brought about by overspending at Christmas. That’s according to new figures from R3, which suggest that many people already in personal debt spent heavily at Christmas, and are now finding themselves not meeting minimum payments. But, R3 president Peter Sargent warns that it is only the stigma of insolvency that prevents the numbers being even higher. He claims that many people in financial difficulties put off taking action for around six months often making matters worse in the process. A record 150000 are expected to need official insolvency help this year, this may include an Individual Voluntary Arrangement (IVA), Bankruptcy or a Debt Relief Order for non-homeowners with very limited assets. This an estimated 12% increase on 2009. EuroDebt director Vance Parsons says: “With the number of IVAs rising by 29 per cent in quarter four of 2009 compared to the same period in 2008, we would expect to see a continued rise through 2010. “Debt Relief Orders (DROs) were only introduced in April 2009, so this will be the first year we will have had a chance to see the full impact. We expect to see more and more indebted consumers seeking debt relief through Debt Management Plans (DMPs), IVAs, Bankruptcy and DROs.”
