Debt cloud on horizon

Sep 14 2007 By Jon Griffin, Birmingham Mail

CASH-STRAPPED Midlanders who ignore their debts to go on holiday could be facing their day of reckoning, it was claimed today.

Summer spending in search of sunshine could leave many debt-ridden households in the lurch as the financial chickens come home to roost, according to insolvency expert Ian Gould.

Rising interest rates are already hitting those in debt hard and, combined with summer spending, will set the Government's insolvency figures back on an upward trend, said Mr Gould, insolvency partner at accountants and business advisers PKF in Birmingham.

"The Citizens Advice Bureau figures showing a 20 per cent rise in the numbers requesting debt-counselling reflects what I see and strengthens my opinion that insolvencies are on the rise again," he said.

"Next to Christmas, the summer period is one of the main pressures people face to spend.

"Everyone likes a break and those in debt have more reason than most for wanting a istraction from everyday problems."

"The issue is whether they can afford it or whether any additional spending on top of interest rate hikes just makes their situation worse.

"The Government's second quarter insolvency statistics showed a fall in the numbers of people going bankrupt or taking out an IVA."

Mr Gould added: "With the summer season over and no letup from the Bank of England likely, I predict the figures will breach the 30,000 mark for the first time."