Banks Writing Off £40 Million a Day in Bad Debts

17th September 2010

Bank of England figures have revealed that banks are writing off enormous amounts of money to cover bad debts. Between April and June of 2010 this totalled £3.5 billion or around £40 million per day.

60% of these write-offs resulted from credit card debts that could not be repaid. A further 34% relates to overdrafts, personal loans and hire purchase agreements.

Reported in The Mail, September 1, a CCCS spokesperson said: “We think a lot of the pain caused by the recession has been deferred. Once interest rates start to rise, which they inevitably will, or there are mass public sector job cuts, the situation is going to get even worse.”

A Director of RSM Tenon (a company who are represented by Kevin Mapstone on our Trust Deed advice forum) was quoted in the same article as saying: “It is not necessarily that people have lost their job, but they have lost their overtime, an extra shift or have had a pay cut. They can survive for a while, but suddenly they are tipped over the edge and cannot cope with their debts”.

Such enormous write-offs at the banks, alongside the looming threat of redundancies and rising interest rates, presents a gloomy picture for the coming months and years and highlight the increased popularity of Trust Deeds and other such debt management instruments. With so many debt management solutions out there and many not explained in layman’s terms, our Trust Deed advice forum is an essential resource for all those struggling with debt issues.

Without a significant private-sector led recovery it would appear that increasing numbers of people will have to fall back upon options such as Trust Deeds or debt management plans to deal with debts that are no longer manageable.

To keep abreast of the current situation and to see how further developments pan out, visit www.trust-deed.co.uk . Our Trust Deed advice forum is full of relevant and concise information just like this, so you can keep up with all the latest industry changes before you make any important decisions.

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