Money Debt & Credit In The Media

Star, BRITS' personal debt total now stands at a scary £1.3TRILLION and it might get a whole lot worse.

The crises of Juley in EastEnders and Sean in Hollyoaks are not just soap storylines.

Star, BRITS 'Personal debt total now stands at a scary £1.3 BILLION and it might get a whole lot worse'

Ex-market trader Juley has racked up thousands of pounds worth of debt on his credit cards and can't afford to pay his rent. Sean has funded his playboy lifestyle with his plastic.

Does that sound familiar?

Typical debtors are in there 20s or 30s with credit card and personal loan debts of more than £40,000, says credit information providers Equifax.

One in five bankrupts is under the age of 30 and there could be about 40,000 Individual Voluntary Arrangements (IVAs) this year.

Neil Munroe, of Equifax, said: "Art is imitating life as many soaps are now taking inspiration from the growing levels of consumer debt."

"Borrowers who have accumulated a significant amount of personal debt are more vulnerable to economic upsets. Even small changes to their circumstances can significantly affect their ability to meet their repayments. We found that almost 40% of people aged 26 to 40 would not be able to survive for more than a month if they lost their jobs."

Advice

You know when you've taken on too much debt when the amount you owe reaches the same amount as your annual income.

IVA specialist Jon Bartman, of Money, Debt and Credit, said: "That's when you realise that, without spending a penny on living expenses or even paying tax, it would take you over a year to pay off what you owe. That is when people finally confide in their family and friends as Juley has done in EastEnders, or they seek professional advice."

The IVA option is a legal agreement made by a third party with your creditors, instead of going to court and declaring bankruptcy, they try to arrange a more manageable sum that you can afford.

You have to agree over a set time, or in one lump sum. Many creditors prefer to receive a smaller amount of money from you than nothing at all.

The company sorting out the IVA doesn't normally charge unless it is agreed and then the fee becomes part of the payment.

Mr Munroe said: "We urge people to look at the long-term impact of debts rather than the short-term gratification they provide. People need to get back in control."

Michelle Carter