Increased reliance on credit ‘could lead to insolvency problems’

Posted 01/06/2010

People in the UK have been warned that relying on credit to pay everyday expenses could lead to insolvency.

Richard Sorsky from the UK Insolvency Helpline Debt Advice Service revealed that the organisation has seen 40 per cent more calls from concerned members of the public between January and April 2010 than was the case in the same period of 2009.

He said this could be because people are worried about the impact of a new government on their finances, but also because Britons are using borrowed money to pay off other debts.

“They’re drawing cash out on their credit cards and paying their mortgage, which is financial suicide,” Mr Sorsky warned.

Last month, moneysupermarket.com found that 14 per cent of people in the UK use their credit cards for day-to-day spending.

Meanwhile, the Ministry of Justice recently released statistics which showed that the number of people declaring themselves insolvent or bankrupt in the first three months of 2010 increased when compared to the previous quarter.

Anyone affected by such problems may wish to seek the advice of an insolvency expert such as a solicitor.