The company Debt Free Direct has issued a warning to consumers to seek debt advice as soon as they can once they feel that their personal finances are getting out of control. And increasingly debt loans will play a major role in the coming years as people struggle to make ends meet. The Insolvency Service has released figures that show a worrying increase in the number of personal insolvencies; this year alone it had increased by 5% on the same period last year.

This report reveals that 34,743 people in England and Wales have become insolvent in the three months before June; there is some comfort in the fact that this is a 2.6% decrease from the first quarter of 2010. However, experts believe that this continually high rise in insolvency figures will continue on through the year and into the next, and warn that there is the possibility of another sharp increase.

The exact composition of the insolvencies are as follows: there were 14,982 reported bankruptcies, 13,466 Individual Voluntary Arrangements and 6,295 Debt Relief Orders. Whilst bankruptcies were down 20.6% from last year, Individual Voluntary Arrangements were up by 10%.

Commenting on the statistics, Derek Oakley, Debt Free Direct’s Insolvency Director, said: “This 5% year-on-year increase in personal insolvencies shows consumers are still struggling in the wake of the credit crisis. Consumers are advised to continue to be cautious with their finances and seek debt advice sooner rather than later if they are experiencing difficulties meeting their financial commitments.”

There are a multitude of factors that can contribute to personal insolvency: government cuts to public spending, redundancies, tax increases, increased interest rates, all of these have been attributed to the rising number of insolvencies.

It is no wonder, then, that debt loans are on the increase. With the strain of the current economic climate, people are desperate to find ways to keep themselves out of the red.

Guest Article by Neil Camp

The newspaper reported that while some officials think that declaring bankruptcy is the best option for Fergie, her ex-husband, The Duke of York, is trying to draw-up a rescue plan, which could include something like a debt consolidation plan.

It’s said that The Duchess of York has debts totalling five million pounds and her financial situation has not only alarmed the Queen and the rest of the Royal Family, but also that it has been discussed with the Prime Minister, David Cameron.

What makes the situation tricky say independent observers, is that up to now, no senior member of the Royal Family has been made bankrupt and if Fergie does decide to fall on her sword, it will be an unwelcome shock wave through the British establishment.

And The Duke of York will feel the embarrassment most keenly, especially as he is the UK’s Special Representative for International Trade and Development.

As to the figure of five million pounds, it is understood that the debts are split almost equally between UK and US creditors. The interest continues to accrue on the debts and is reckoned to amount to several thousands of pounds every month. But currently Fergie has no real income to cover the payments.

The Duchess of York has suffered a number of recent setbacks, including a major gaffe when she was filmed by the News of the World allegedly selling access to her ex-husband for half a million pounds. Everyone involved in the incident has made it clear that the Duke had no knowledge of his wife’s dealings to sell quality time with him.

Indeed, the Duke of York is said to have personally settled some of his former wife’s debts and obligations.

Inside sources say that Fergie built up the debts through a lack of understanding about money. Not only has she been incredibly generous with friends and colleagues, but she has also been using expensive lawyers both in the UK and the US. She is said to have not fully appreciated the amount of fees that legal teams can charge for advice.

The 50-year-old Fergie has been in this situation once before, having amassed debts of just over £4 million in the mid 1990s. On that occasion she went to America and earnt millions to repay what she owed. She became an ambassador for a weight loss company and also published her autobiography.

Experts reckon she can’t pull the same trick twice though, as her earning power has dipped in the US, where she is no longer seen as a credible character.

Debt consolidation might just be one of the tactics Fergie might use to stave off bankruptcy.

Guest Article by Neil Camp

The good folk at confused.com have risked the wrath of those living in God’s promised land by saying that in the UK, the closure of one in five accounts by the provider was due to non-payment. And Yorkshire residents exceed the national average by 13%, with 35% of accounts closed by the provider due to repayment failure.

But before thoughts of bringing out that old hackneyed debate about the north and south divide, the research also reveals that the North East is best at repaying with only 8% having their accounts closed for not meeting monthly payments. And, a close second to Yorkshire is the South East, 33% of which have suffered the same penalty. Incidentally, alongside the North East’s exemplary residents were the people of east Anglia, who also only had 8% of defaulters.

Head of credit cards at Confused.com, Joanne Garcia, said:
“Credit card users in all regions need to understand how damaging it can be to miss repayments. While it may not seem like a big deal to miss a few payments here and there, credit providers – which include mortgage lenders – leave no stone unturned when it comes to checking a person’s credit worthiness. It they see a history of non-payments it makes it much more difficult to borrow money.

The research at confused.com, which is owned by the Admiral Group plc don’t say how many people they asked, or how they got their figures, but it is hoped that they have done their homework about the Yorkshire figures. Although confused.com should know what it’s talking about of course, as it generates over one million quotes per month. From its origins in 2002, it has expanded its range of comparison products to include car insurance, home insurance, travel insurance, pet insurance, van insurance, motorbike insurance, breakdown cover and energy suppliers, together with financial services products such as credit cards, loans, mortgages and life insurance.

Guest Article by Neil Camp