20,000 may become insolvent in 2012

06/01/2012

More than 20,000 Scots could become insolvent during 2012 after being unable to pay off their debts, accountancy firm PKF has warned.

In the third quarter last year, 5,378 Scots became insolvent. This is an increase of 210 more year on year.

Bryan Jackson, PKF corporate recovery partner, said: “There was a widespread assumption that in 2011 the economy would start to show signs of recovery and that personal insolvencies would stabilise, albeit at an extremely high level.

“However, the fluctuations in the economy, the difficulties in the eurozone, and the clear impact of public sector cuts are increasing the number of Scots facing financial difficulties.”

An expert for financial solutions company Think Money added: “Even though the financial crisis has been going on for a few years now, we are arguably yet to see the worst of it. Many people are already struggling to deal with their living costs, yet they face the prospect of higher travel costs and rising mortgage rates, which could leave some homeowners unable to pay the mortgage, and could lead to higher rental costs.

"That's why people should act now if they have any concerns about their finances. For those who managing well enough, simply assessing their budget and putting money into savings for emergencies could help.

"But for those with more serious financial problems - particularly with debt - expert advice is essential. A debt adviser could help people to avoid insolvency by addressing the problem before it gets to that stage."

Tags; Current UK Economy, Income Worries and Debt, Credit Card Lifestyle,

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