Retailers were concerned that 2008 would be a struggle thanks to rising debt, a global credit crunch and the increased risk insolvency will touch more of our lives than ever before. And although it seems to glossy world of consumerism, high fashion, record couture sales and designer labels is unscathed in the West, the reality is the UK experienced the Northern Rock crisis in 2007, City jobs were lost, bonuses non-existent and insolvency figures set to rocket.

Insolvency – the financial truth

The credit crunch has turned the financial markets upside down after ten years of easy credit, prosperity and materialistic growth. But affluence has a price – the more we spend on maintaining lifestyles, the more money we have to keep earning. The credit crunch means even those considered to be well-off are at risk from insolvency. A cut in salary can have drastic consequences if you have a mortgage that is dependant on every penny earned, whether you live in a bedsit or palatial mansion.

Bankruptcy, insolvency, IVAs and repossessions set to increase

Financial commentators have said insolvency, bankruptcy and debt are set to increase as the ‘engine rooms of capitalism' in the City have sold equity to the Middle East and China to free up cash. The result has been a lot of analysis and speculation about the impact of debt risks and insolvency. The Northern Rock crisis was a wake up call to many who previously hadn't given the notion of insolvency, bankruptcy or negative equity a second thought.

Economy on the brink

Although many economists have urged calm during the on-going speculation about whether the UK faces an economic slump, with an increase in home repossessions, insolvency and negative equity, Mervyn King, governor of the Bank of England has warned of a "palpable sense of fear" that could ‘send the economy into free fall'.

Record numbers driven to insolvency

The past ten years has seen the super rich get even richer – the number of millionaires has increased dramatically, and in the UK you need to have £70m now to get onto the top 1,000 rich list. Some believe this has triggered middle class consumerist envy as they are out-priced from good neighbourhoods and schools. The desire to consume alongside the inflated cost of home ownership and education however means there will be record numbers driven into insolvency.

Varden Nuttall has been established for more than 15 years and is dedicated to helping people in financial difficulty find a debt management solution through an individual voluntary arrangement (IVA). We employ 90 people, including trained and skilled individual voluntary arrangement administrators; we are one of the largest individual voluntary arrangement companies in the UK and handle more than three per cent of all individual voluntary arrangement applications. To find out more about the company, or to make an appointment to talk about putting an individual voluntary arrangement in place, call us today on 0800 031 9802 or fill in our online enquiry form.