CreditAction statistics - an invaluable source - and some new initiatives

16 MAR 2009

Hat tip to Christoffer, a KU postgraduate insolvency student, for highlighting the excellent CreditAction debt statistics material for March 2009. These statistics, in tandem with those at the Insolvency Service, make fascinating reading. Here are some highlights from the CreditAction statistics for March 2009:

"Today in the UK

  • The average household debt will increase by £1.45 today (a decrease from £11.11 a day in January 2008)
  • 323 people today will be declared insolvent or bankrupt. R3 estimate this will increase to 435 people a day throughout 2009 or 1 person becoming bankrupt or entering into an Individual Voluntary Arrangement (IVA) every 3.3 minutes.
  • In 2008 consumers saved an average of £5.15 every day
  • 2,430 Consumer County Court Judgements (CCJs) will be issued
  • 144 properties were repossessed every day during the last 3 months to end September 2008. The Council of Mortgage lenders estimates this will increase to approximately 205 a day throughout 2009.
  • Unemployment increased by 1,600 people every day during 3 months to end December 2008.
  • 2,831 people reported they had become redundant every day during 3 months to end December 2008.
  • £91m is the interest the Government has to pay each day on the UKs net debt of £703.4bn.
  • 33,600 applications for credit have been turned down every day during the past six months.
  • 285 mortgage possession claims will be issued and 319 mortgage possession orders will be made today
  • 396 landlord possession claims will be issued and 304 landlord possession orders will be made today.
  • 20.3m plastic card purchase transactions will be made today with a total value of £1.02bn.
  • Citizen Advice Bureaus dealt with 7,241 new debt problems every day
  • The average car will cost £16.80 to run today
  • £504m will be withdrawn from cash machines today."

It is against this backdrop of growing personal consumer over-indebtedness that Dr Gordon Brown MP, Ms Yvette Cooper MP (Chief Secretary to the Treasury) and Mr Gareth Thomas MP (Consumer Affairs Minister at BERR) have announced the introduction of a raft of new (and not so new) initiatives to help the over exposed consumer in the current recession climate. In a press release dated the 17 March 2009 the three ministers outline the various initiatives and how these will help the consumer. The initiatives include areas which touch on the law of insolvency. The press release notes:

"The Government today set out a package of real help to benefit consumers during the downturn:

  • Fair rules for debt enforcement - new measures will be introduced to provide clarity for debtors and certainty for creditors in advance of full independent regulation of the bailiff industry. Bailiffs' powers of entry and force will not be extended and reforms to charging orders will not be introduced. There will be consultation which will set out the new rules and the way forward.
  • Credit cards - the Government will stop lenders from raising credit card borrowing limits where customer have not requested the increase, and it will end the practice of firms sending unsolicited credit card cheques. The Government will legislate at the earliest opportunity.
  • National Fraud Strategy - later this week the Government will set out the action it will take to tackle fraud which costs the UK £14 billion a year, and protect consumers from mass marketed frauds such as bogus lotteries, get rich quick schemes and investment scams.
  • Debt Relief Orders - from April, people on low incomes with limited debts who could not previously afford to go bankrupt will able to write off their debts and start again after a period of 12 months. This is not an easy option for people in debt - the insolvency will be a matter of public record and creditors will be able to apply to have the order revoked. But it will help those trapped in poverty.
  • The Money Guidance pathfinder - impartial sales-free advice on money issues will be available in the North West and North East of England from next month. It will help people stay in control of their finances, help them cope with income shocks and avoid the distress of problem debt.
  • Debt advice - the Government is currently reviewing the provision of debt advice to tackle any gap between capacity and demand and ensure we get the most out of the existing network of providers. This work will conclude before the summer. The Government invested £15.85 million in the debt advice sector at the last Pre-Budget Report in addition to the £130 million invested since 2006."
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