Personal debt write-offs soar

More and more families are failing to cope with their financial problems, according to new figures from the Bank of England.

Total write-offs of personal debt by financial institutions rose to £9.3 billion in 2009 from £6.9 billion in 2008.

And even households that do manage their repayments are feeling the effects of the defaults. Higher bank charges and tougher conditions for mortgage and personal loan borrowing are spreading the misery.

Plus those are just the figures for personal debt write-offs - £5.9 billion of debt from non-financial businesses was also written off last year.

Many of the big high street banks have announced their business results in the last few weeks, and many have shown big deficits due to bad debts.

Lloyds TSB, for example, lost £24 billion in bad debts last year.

Atlantic director Vance Parsons says: "Debt write-offs are generally the tip of the iceberg. After Christmas there is always a rise in early stage arrears and more serious arrears where consumers are more than 3 payments behind on credit card debts or personal loans. With people feeling they have to increase credit card debts just to make ends meet then this is likely to lead to a debt spiral."

Debt problems – payday loans

15/03/2011

Once again British consumers struggling against debt problems have been told to avoid resorting to t ...

Debt problems: Interest rate threat

14/03/2011

An increase in interest rates could plunge hundreds of thousands of households into debt problems. < ...

Debt problems: borrow to pay debts?

08/03/2011

People thinking about borrowing money in a bid to alleviate their debt problems have been told only ...

Debt problems – pay off debt

07/03/2011

People with debt problems currently considering the best ways to deal with them, might be interested ...