KPMG, one of the biggest accounting firms, is warning that more than 10 million people may default on credit repayments before the end of 2008.
Millions of people may have to come to terms that their take-home pay is not enough to service repayments on mortgages, personal loans and credit cards
Local councils appear to be taking a tough stance over council tax debt, and are petitioning for bankrupcies over debts of as little as £1200.
It is thought that authorities are getting tough over arrears in order to meet govenment-set performance targets.
New figures released by the Citizens Advice Bureau (CAB) once again show the extent of Britain’s personal debt problems, with the number of people seeking help rising by 20%.
The Council of Mortgage Lenders have reported a steep rise in the number of homes being repossessed, with an estimated 14,000 properties being seized in the first half of the year, up 30% from the same period last year. It’s not all bad news apparently though, as the number of mortgages in arrears fell slightly over the same period, 3% down to around 125,000.
The latest official figures show a rather unexpected fall in the number of people in England and Wales becoming insolvent. A shade under 27,000 people went into insolvency during April to June this year, and although the figure represents a 4.2% rise on the total for the same period last year, it is a drop off of 8.1% on the figure for the first quarter.
Price comparison site moneysupermarket.com has released results of a survey showing the huge number of people going overdrawn on their current accounts. Over half of the UK workforce have gone into the red on at least one occasion over the last year, while over two million workers never manage to get into the black - they’re overdrawn even at the start of the month.
Former world champion Scott Harrison has been forced into bankruptcy following the failure to clear an £83,000 tax debt.
The boxer had hoped to use the proceeds of a £350,000 property sale to meet the demand, although it is thought that had this gone through only £70,000 would have been available, prompting the tax man to push forward with bankruptcy proceedings.
The Council of Mortgage Lenders has reported that the number of people missing mortgage payments has rocketed to 77,000 a month in the first six months of 2007, compared to an average of 36,000 a month in the whole of 2006.
The rise is blamed on recent hikes in interest rates, and with the built-in time lag between rate rises and their effects being seen, it is feared that the picture could get even bleaker for households struggling to meet their commitments.
HM Revenue and Customs has proposed that it be given the power to seize unpaid taxes directly from the non-payer’s bank account, without recourse to the court order which is currently necessary.
Around 200,000 debtors are pursued through the courts each year, an exercise which is both costly and bureaucratic, and can be used by non-payers to significantly delay paying their taxes.