Debt recovery specialist Moore and Blatch has warned that changes in the public attitude to debt may present lenders with fresh challenges in recovering debts.Statistics from the government’s Insolvency Service show that more than 23,000 people became insolvent in England and Wales during the first three months of 2006. This represents a 73% rise compared with the same period last year. Attitudes to debt were recently under the spotlight in the BBC television series Britain’s Streets of Debt. One programme included an interview with an anonymous high ranking executive at one of the main high street banks. In the interview she said that “every branch of every bank and every individual who works in a bank has ambitious targets to sell you more products – effectively to make you borrow money and get you further into debt”. Paul Walshe, head of lender services at Moore and Blatch, says: “The Council of Mortgage Lenders has reported rises in arrears and repossessions over the past year and this indicates that tougher times may be round the corner for lenders. It’s a good time to tighten procedures for arrears management and shortfall recovery.” But Bob Sturges, director of communications at Money Partners, says it’s important to keep these statistics in context. He says: “Repossessions remain at low levels. And while it’s true that the number of court orders has risen, partly as a result of lenders using them as an account management tool, repossessions are modest in comparison. For example, in 2005 70,000 orders were made and 10,250 homes repossessed. This year the CML forecasts a relatively small rise in repossessions to 12,000.” Sturges adds that the rise in insolvencies is due to changes in bankruptcy laws making it easier to declare bankruptcy and the fact that it no longer carries a social stigma. Claire Mortimer, spokeswoman at BM Solutions, says: “Consumer attitudes toward debt have changed. But a shift in culture does not have to lead to disaster as is being suggested in some media. People need to be educated on the balance between saving and debt but scaring them is unlikely to help.” • See Analysis
- Top trends
The World Cup has finally kicked off in Germany, following the controversy over whether all Brits should follow the England team or if it’s OK to side with the opposition.
SmartNewHomes says rising London prices could be pushing buyers at the lower end of the market out of the capital.
Addleshaw Goddard is leading a trio of society mergers following the announcement of Universals proposed merger with Newcastle.The deal is expected to be effective on December 31 2006. The combined society will remain a mutual and will be named Newcastle Building Society.Addleshaw Goddard has been involved with every one of the last nine society mergers […]
I don’t read the Sunday papers often but lured by a World Cup guide I did so last Sunday. In some ways I regret it.
By Fiona Tait, pensions specialist In her final article for Royal London, Fiona Tait reviews key changes she believes have transformed, or will transform, pensions. In my 12 years with Royal London I have been paid to review, study and explain the numerous changes to pension legislation which have transformed our industry in that time. This is […]
News and expert analysis straight to your inboxSign up