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Increase in Trust Deeds Predicted for 2011
7th January 2011
As reported in The Herald, accountancy firm and trust deed provider PKF are predicting a record number of Scots will have to resort to formal insolvency procedures in 2011. Formal insolvencies include sequestration (bankruptcy) and protected trust deeds.
PKF also estimated that around 1800 bankruptcies or trust deeds went ahead in Scotland in each month of 2010. It is predicted that there will be an increase to around 1900 bankruptcies and trust deeds each month in 2011.
PKF share our view that an increase in mortgage rates during 2011 will add further financial pressure on those individuals already in financial debt.
These predictions follow those of RSM Tenon (a company represented in our trust deed forum by Kevin Mapstone) who recently announced their prediction that both 2010 and 2011 would see record levels of insolvency throughout the whole of the UK.
Further financial pain is being inflicted by the VAT rise alongside the continued increases in necessities such as gas and petrol. The VAT rise alone will add a further 3p to each litre of petrol purchased.
One sign of financial distress currently evident is the increasing use of payday loan companies, doorstep lenders, pawnbrokers and other expensive credit sources. Given the extraordinary interest rates levied by many of these operators, debt problems are likely to be magnified rather than resolved through the use of such products.
Anyone struggling to manage their debts or who is currently behind on repayments is advised to seek professional advice as to their options. A number of debt solutions, including a protected trust deed, exist to deal with all types of debt difficulty. Readers are warned to avoid the use of high-interest lending unless they can clearly afford to repay these debts and all of their other commitments without further borrowing.
For further information regarding protected trust deeds, please do not hesitate to contact our team of established industry experts.
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