Britons unrealistic about their unsecured debts

Twenty-three million adults in the UK have unsecured debt beyond their mortgage, according to research from personal insolvency experts Vincent Bond & Co.

Furthermore, the study revealed that although 90 per cent of those in debt believe they will be able to pay back their debts themselves, nearly one million will, in fact, be unable to do so and will seek a debt solution to relieve the financial pressure.

19 per cent of Britons who have more than £20,000 of unsecured debts will be unable to repay it themselves, although, when asked how they would clear their debts only 10 per cent said they had a debt management plan in place or will seek one, 4 per cent said they had an Individual Voluntary Agreement or will seek one and 2 per cent said they had claimed bankruptcy or will seek to do so.

Managing Director for Vincent Bond & Co, Steve Rees, said: “Looking at the trends for 2011, this year there have been five times as many personal insolvencies as there were ten years ago. The fact that 90 per cent of people believe they can take care of their debts themselves even though this is clearly not the case, is worrying. I would advise all these people to seek help and deal honestly with their debts.”

He added: “What will it take for Britons to face the truth and deal with their debts? Coming to terms with debt is never an easy thing to do, and the fact so many people have such a high amount of debt is alarming.

“If you had £20,000 of debt and could afford to pay £200 per month it would still take you almost a decade to be clear of the debt in full. I would recommend those with such high levels of debt seek professional advice and start clearing it now.”

Categories; Current UK Economy, Income Worries and Debt, Debt Management and Banking,