1 in 11 North West adults has debts of over £20,000

By December 16, 2014Finance, News

One in every 11 adults in the North West (9%) owes more than £20,000, excluding mortgages and student loans, according to research by insolvency trade body R3.

Of those who are in debt, the average owed is £5,148 – equivalent to almost 11 weeks’ average weekly earnings for a UK worker (£481 per week) or nearly seven months’ average rent in England & Wales (£770 per month).

The R3/ComRes poll of 196 North West adults also found that, while 43% of people in the North West were debt free, a similar proportion said they were worried about the amount they owed. Of these, credit cards were cited as the main concern (48%), followed by loans from family and friends (18%), mortgage repayments (16%), rent arrears (13%), student loans (12%), tax bills (8%), bank loans (7%) and payday loan repayments (6%).

Richard Wolff, who is North West chair of R3 and also Head of Corporate Recovery and Insolvency at JMW Solicitors, says: “The fact that the North West’s average personal debt is equivalent to almost three months’ wages is a cause for concern. That’s a lot of financial ground to make up if debts need to be repaid quickly or if someone’s income is interrupted.

“Personal debt levels have ballooned in the UK over the past decade. For many, being in debt has become the norm; there’s much less of a stigma attached. Where the debt is manageable, this isn’t a problem but it can be all too easy to get caught in a debt trap, where trying to deal with one debt results in further debts arising.”

Richard Wolff adds: “Some levels of debt are extreme but even those with relatively low value debts need to tread carefully. You only need to be unable to pay £750 to one creditor to face the risk of a petition for bankruptcy.

“If people have problems with their debts, early action is best. The more that debt builds up, the fewer options there are to tackle it effectively. If you owe over £15,000, for example, you would be ineligible for a Debt Relief Order.”

 

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