Welsh Residents Struggling With Debts

by : Tom_dawson

People living in Wales appear to be increasingly struggling with their finances, new research suggests.

In figures released by the Insolvency Service earlier this week, it was revealed that some 2,009 consumers in the principality filed for an individual voluntary arrangement (IVA) over the course of 2006. Such a figure represents growth of 146 per cent from data recorded in 2005 and an increase of 400 per cent from 2000.

Meanwhile, an estimated 2,800 cases of bankruptcy took place in Wales in 2006, up by 47 per cent from the previous year. Furthermore, this type of insolvency has increased by 156 percentage points from the beginning of the century.

Following such statistics it is possible that more consumers are developing problems meeting repayments on borrowing such as mortgages, UK personal loans, credit and store cards and overdrafts. In addition, such people may also find that they experience difficulties with other financial demands such as utility bills and transport costs.

Those living in Caerphilly appear to be under particular money management pressures as the number of people in the southern Welsh town filing for an IVA has gone up by 662 per cent since 2000. Meanwhile, Newport has witnessed a 629 per cent surge in this type of insolvency during the same period of time. From the same year bankruptcies in Merthyr Tydfil and Denbighshire have gone up by 275 and 259 per cent respectively. Cardiff, the biggest city in Wales, has seen IVAs and bankruptcies increase in popularity by 149 and 68 per cent between 2005 and 2006.

Commenting on the figures, Jenny Willott, Welsh Liberal Democrat MP for Cardiff Central, said: "These shocking figures are further evidence that the ticking personal debt time bomb we have long warned about is starting to explode in Wales. Credit card debt is soaring, repossessions are rising and now we see a huge jump in the number of people in Wales going into bankruptcy or turning to IVAs. A big problem fuelling the rise in personal debt is the low level of financial literacy and understanding of how best to manage personal finances."

The MP stated that due to a lack of awareness in regards to fiscal matters, many consumers are often "unable to manage their debt effectively". She went on to claim that there is a "huge demand" from members of the public for advice on money matters. As such, the Liberal Democrat member reported that both the government and the financial services industry must do more offer to financial guidance to people. "It is time for them to act before thousands more in Wales end up in the red," Ms Willott added.

For those who have experienced financial difficulties in the past but wish to avoid filing for bankruptcy or an IVA, taking out a bad credit loan could be advisable. This type of loan might be useful for consumers who have previously struggled with money in the past but are now confident about their capacity to meet demands for payment. Taking out a poor credit loan could be of assistance to an increasing number of people after recent figures by the Ministry of Justice indicated that Britons looking to file for bankruptcy surged from 52,717 in 2006 to 53,114 last year.