Credit card debt can be dangerous, and economists have expressed fears that more people will fall into unmanageable personal debt in the wake of the rising cost of living. Insolvency figures could rocket as a result of the increases across the board in the UK. As the country faces the prospect of a fuel famine, toys with the idea that negative equity could become a reality and sees teachers going on strike on the news, it's hard not to flash back to the troubled Thatcher years of strikes, public unrest and sectors of society living on the breadline.

Insolvency – Counting the cost

The global markets are facing meltdown as crop prices soar and the availability of cheap clothes becomes a thing of the past as US farmers switch their cotton crops to more lucrative markets. Petrol and fuel prices have never been so high, and mortgage companies and banks are passing on expensive rates to safeguard their profits. The high cost of day-to-day living is forcing more UK consumers not just to put holidays or luxury spending on their credit cards, but to put essentials like utility bills, mortgage repayments and food on credit – putting more people on the breadline and at a higher risk of insolvency.

Debt culture faces insolvency risk

The fear more credit card users could be at risk of insolvency has been expressed by leading accountancy, PricewaterhouseCoopers. PWC told the BBC that it predicts the UK will start builing up unmanageable piles of credit card debt to cope with rising living costs and mortgage repayments.  Although in 2007 credit card debt dropped slightly, it's estimated this will quickly turn around in light of the current economic downturn. More people are accepting of credit cards than ever before as debt is firmly fixed into our culture. Some people have already amassed massive debts through student loans to pay for their university education or to get onto the property ladder leaving them with little or no savings, pension or equity to fall back on when times get tough. Insolvency could be the only way out of uncontrollable accumulating debt.

Insolvency hits all sectors of society

It isn't just the younger generations who over borrowed to buy property or fund an education who are at risk; pensioners who can no longer rely on equity in their homes as house prices fall, could end up having to make difficult decisions when it comes to their finances. Pensions simply don't match the high cost of utility and food bills, and for some debt can quickly become a difficult reality. Insolvency is set to increase in all sectors of society – even the wealthy City workers used to million-pound bonuses are at risk as massive job cuts are predicted on the back of the credit crunch.

Speak to Varden Nuttall About Insolvency

Varden Nuttall has been established for over 15 years and is dedicated to helping people in financial difficulty find a debt management solution through an Individual Voluntary Arrangement (IVA). Employing 90 people, including trained and skilled IVA administrators, we are one of the largest IVA companies in the UK and handle over 3% of all IVA applications. To find out more about the company, or to make an appointment to talk about putting an IVA in place, call us today on 0870 977 8100 or fill in our online enquiry form.