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More go to the wall as credit crunch begins to bite
10:56am Tuesday 20th May 2008
By Gareth Lewis »
THE credit crunch is claiming ever more Hampshire residents, with the numbers of people declaring themselves bankrupt in the county rising by a quarter.
The latest statistics show a 25 per cent increase in people petitioning for their own bankruptcy in the county, as opposed to being forced into bankruptcy by a creditor, from 289 cases in the fourth quarter of 2007 to 360 cases in the first quarter of 2008.
The increase in Southampton was slightly lower than the rest of the county with a rise of 15 per cent, from 123 in the fourth quarter of 2007 to 142 in the first quarter of 2008.
Nationally, the three months to March 31 saw an increase of 11 per cent in the number of people making themselves bankrupt, according to new figures from the Department of Justice.
The figures reveal that 13,275 people successfully petitioned the court to bankrupt themselves and 8,805 agreed an IVA in the quarter January to March 2008.
Mark Sands, director of personal insolvency at accountants KPMG's South Coast office, said: "People carry on digging a hole without realising they're in too deep.
"Typically they are £50,000 in debt. It starts with a few small things - conservatory or a holiday or whatever.
After that they're recycling the debt with credit offers with a view to saving money but in reality they're just building it up.
"Someone could end up bankrupt with £50,000 of debt but they've probably only spent £20,000 of that, the rest is interest and household expenditure.
"Now, because of the credit crunch, people can't borrow and I think the increase in the numbers declaring themselves bankrupt is down to people realising they've got a problem earlier than they otherwise would."
Christine Wall, debt advisor for Southampton Citizen's Advice Bureau, said: "We have noticed that the numbers have gone up quite considerably.
"People can't cope anymore and they are trying to find a solution. You pay what you can afford but it doesn't do anything to the debt and you think you are going to be paying it for 50 years, then going bankruptcy is an attractive proposition.
Your Say YourEcho
Fred, says...
11:13am Tue 20 May 08
When the recession does bite watch for 500% increases in bankruptcy rates.
Doom Mongers, says...
11:40am Tue 20 May 08
hmm, says...
11:43am Tue 20 May 08
Doom Mongers wrote:100 % nail on the head
Stop being talked into a recession by the media. If people are fearful and stop spending for no other reason than constant inaccurate financial reporting by sound byte journalists,the result is a knock on effect for the whole country i.e. higher interest rates,higher inflation etc...
The media have a lot to answer for
Clark Kent, Metropolis says...
11:44am Tue 20 May 08
Doom Mongers wrote:So journos are immune to higher interest rates and inflation are they?
Stop being talked into a recession by the media. If people are fearful and stop spending for no other reason than constant inaccurate financial reporting by sound byte journalists,the result is a knock on effect for the whole country i.e. higher interest rates,higher inflation etc...
Perhaps they are just reporting what is happening...
Gilmore, Shirley, Southampton says...
12:17pm Tue 20 May 08
But seriously, journos need to stop sensationalising and panic mongering, lending companies need to stop encouraging the poor and weak to borrow more and more money and the government needs to revise how debt agencies operate.
John B, Eastleigh says...
1:28pm Tue 20 May 08
Clark Kent wrote:The housing market is stagnant at the moment - not because of lack of credit - but because the media are predicting a fall in prices - who wants to buy when the press constantly say prices will go down.
Doom Mongers wrote: Stop being talked into a recession by the media. If people are fearful and stop spending for no other reason than constant inaccurate financial reporting by sound byte journalists,the result is a knock on effect for the whole country i.e. higher interest rates,higher inflation etc...So journos are immune to higher interest rates and inflation are they? Perhaps they are just reporting what is happening...
The market is reacting to what the press report so yes, it is (partly) their fault.
REBECCA,PORTWOOD, southampton says...
2:27pm Tue 20 May 08
lowe and behold, st marys hotseat says...
3:03pm Tue 20 May 08
We're all doomed!!!!!!!!!!!!, Glasshalfemptyland says...
3:35pm Tue 20 May 08
lowe and behold wrote:If the scaremongering is to be believed, it is the middle class "keep up with the Jones" bigger house better car types which are destined to struggle.
The majority of people are now doubt living in council flats cant afford to re pay the catalogue money back. Dole cheats credit cheats
I don't think that too many bedsit/council flat/council houses will be repossesed!
lowe and behold, st marys hotseat says...
3:53pm Tue 20 May 08
We're all doomed!!!!!!!!!!!! wrote:yes these low life are to blame.
lowe and behold wrote: The majority of people are now doubt living in council flats cant afford to re pay the catalogue money back. Dole cheats credit cheatsIf the scaremongering is to be believed, it is the middle class "keep up with the Jones" bigger house better car types which are destined to struggle. I don't think that too many bedsit/council flat/council houses will be repossesed!
ps i dont suffer from the above my home is paid for so are my cars and money in the bank life is such a struggle. watch out repo man is comeing for you dole cheats
Ron the Pole, Petersfield says...
4:14pm Tue 20 May 08
am going home to Poland.
Banker, says...
6:47pm Tue 20 May 08
Clark Kent wrote:Perhaps. But, actually, not. Believe the media, and apparently it's virtually impossible to get a mortgage now unless you've got a huge deposit. Not in the least bit true. 5% deposit will still get you a pretty decent mortgage. Doom Mongers and his cohorts above are spot-on.
Doom Mongers wrote:So journos are immune to higher interest rates and inflation are they?
Stop being talked into a recession by the media. If people are fearful and stop spending for no other reason than constant inaccurate financial reporting by sound byte journalists,the result is a knock on effect for the whole country i.e. higher interest rates,higher inflation etc...
Perhaps they are just reporting what is happening...
What does bankruptcy have to do with the credit crunch anyway? If inability to obtain credit affects your ability to live day-to-day, bankrupcy was only round the corner anyway
jason bourne, can't say says...
7:51am Wed 21 May 08
Ron the Pole wrote:make sure you fill your car up with all your freinds
Your country used to be cheap but not any more.I am going home to Poland.
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hulla, baloo says...
11:12am Tue 20 May 08
Is far too easy to get credit and about time to ban credit cards, and to have a serious overhaul of the lending criteria and methods.