Citizens advice response to insolvency figures

Senior debt policy officer Sue Edwards said: “These figures are not surprising to us as last year (2005/06), bankruptcy accounted for 65,000 of the debt problems handled by CAB advisers. Our bureau network also dealt with an estimated 7,000 enquiries concerning IVAs.

“This reflects the huge increase in the number of people struggling with large amounts of consumer debt. Citizens Advice bureaux dealt with 1.4 million debt problems in the last financial year. There are thousands of people who have substantial debt and will never be able to pay it off, which is why there need to be affordable options in place for them. “

“For many CAB clients with substantial debts and no available income to pay them, bankruptcy may be the only realistic option. However bankruptcy is not always an affordable option. We see many people too poor to go bankrupt. That’s why we are pleased that the Government is now going to introduce Debt Relief Orders, a low cost, out of court insolvency remedy targeted at debtors with low incomes and few or no assets.”

“IVAs can be the right option for some people in some circumstances, but they are certainly not appropriate for everyone with serious debt problems.

People should only take out an IVA if they have had access to clear, impartial advice about all their options and are fully confident that an IVA is the most appropriate thing for them.

“We would urge anyone with serious debt problems to get free, expert, independent advice from a Citizens Advice Bureau or other free and independent advice agency.”

Debt fact sheets are available at adviceguide.org.uk.