Under half of North West adults shoulder debt burden

Under half of North West adults shoulder debt burden

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The personal debt burden in the North West is being shouldered by less than half of the population, according to research by the insolvency trade body R3.

More than half (55%) of adults in the region told the R3 survey that they were debt free. 45% said they had at least one debt while 17% said they had five debts or more.
R3 says the fact that the UK’s personal debt is concentrated in such a relatively small group of adults is a cause for concern.

Richard Wolff, North West chair of R3 and Head of Corporate Recovery and Insolvency at JMW Solicitors, says: “Personal debt has reached worrying levels, especially when you see how unevenly spread the burden is amongst the population.

“The picture is one of extremes. While it’s encouraging that so many people are debt free, there are still plenty who have little room for financial manoeuvre. It certainly wouldn’t take much – even a small interest rate rise, for example – for their situation to become unmanageable.”

40% of North West adults said they were worried about their level of personal debt, with credit cards being the main source of concern. In total one in five adults (21%) said they were behind with payments on at least one card.

Richard Wolff adds: “At the sharp end, where you have people with over five debts, the danger is that they then become caught in a debt trap, where existing debts are only paid for by creating new ones.”

“Personal insolvencies are already on the rise. The economy may be recovering and the financial crisis long over but the same can’t be said of the personal debt crisis that’s arisen over the past decade.”

“Formal insolvency routes will offer a way out for some – and will help creditors see some of their money back too – but reform of our personal insolvency landscape is needed. Without this, we will see people stuck in debt and stuck outside the best ways of dealing with their debts.”