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Aug 23, 2006
The UK’s Department of Trade and
Industry (DTI) is predicting a steep rise in number of bankruptcy petitions
over the next three years.
According to a report on personal debt
released by DTI, the second quarter this year saw a record 26,000 people in England and Wales becoming insolvent. The
situation may worsen in the coming years, and the DTI predicts that by March
2009, bankruptcy tolls may nearly double to reach 28,000. Apart from official
bankruptcy, DTI says the report takes into account credit card debt, mortgage
arrears and the rising demand for debt advice agencies.
DTI warns that things would get worse if
an unexpected recession takes place. However, the government denies that recent
changes to the law have triggered more people declare themselves insolvent. The
government maintains that the Enterprise Act of 2002 has made it feasible to
come out of bankruptcy in a year rather than three.
Debt advisory agency Consumer Credit
Counseling Service agreed with the DTI’s findings, saying that easy
availability of credit cards accounts for much of the debt problem.
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