As the UK battles the biggest cost of living crisis in modern times, the number of households struggling with debt has increased by two thirds since 2017.
Although inflation is expected to fall towards the end of the year, the cost of food and drink was 12.1 per cent higher in September 2023 compared to the previous year.
Financial worries are a key concern for many people. High interest mortgage payments, rent increases, and the soaring price of food and energy means that many people are struggling with unmanageable debt repayments.
Deciding on the right response to personal debt depends on whom the money was borrowed from in the first instance - as different creditors have different approaches.
HMRC, councils and personal guarantors are more likely to issue bankruptcy petitions and/or use bailiff action to recoup their money. It is crucial that people with these unmanageable liabilities seek advice at the earliest opportunity.
Credit card providers and high street banks are usually easier to deal with and may accept payment plans to assist people with repayment, however people should be aware there are many options out there to help.
Options include a Debt Management Plan - which helps avoid formal insolvency, or a Debt Relief Order - available for those with no assets and nominal surplus income and debt below £30,000.
Formal insolvency options such as an IVA and bankruptcy are all possibilities that should be explored by an individual.
At Leonard Curtis, we urge anyone who is worried about their finances to seek advice as soon as possible.
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