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Insolvencies reach lowest level in nearly a decade

Insolvency Service statistics for 2014, released today, show there were 99,196 individual insolvencies in 2014, a 1.8 percent decrease compared to 2013 and the lowest annual total since 2005.
Joanna Elson, chief executive of the Money Advice Trust, the charity than runs National Debtline, commented:
“While it is really welcome to see insolvencies reach their lowest level in nearly a decade, on the debt advice front line we know that more and more people are falling into difficulty with smaller debts from everyday household bills. 
“Household borrowing is also currently soaring as the economic recovery takes hold, with unsecured debt forecast to reach a worrying 184 percent of household incomes by 2020.  While most people will be able to cope with this extra borrowing, there is a risk that many households are becoming overly reliant on credit. 
“Interest rate rise predictions may be receding into the future, but the more borrowing people take on now, the more vulnerable they will be to higher interest rates when they do arrive.  It is crucial that consumers do not rush into taking out credit without thinking hard about the underlying fundamentals of their personal finances – and that anyone struggling to cope seeks free advice as early as possible.”
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