CCCS warns insolvency rise likely to continue

The figures released today by the Insolvency Service show that there were 135,089 individual insolvencies in England and Wales in 2010, up from 134,142 in 2009.

The charity says that a mixture of pressures on household budgets including the recent VAT increase, rising inflation, wage freezes, overtime bans, redundancy and welfare changes will push many struggling debtors over the edge of financial stability and into insolvency.

Delroy Corinaldi, CCCS External Affairs Director, comments:

"The picture is bleak, particularly in view of the pressures on advice services.

"Fee-charging debt management companies must not be allowed to plug the gap left by the reduction in public funding for debt advice. It would compound the situation if overindebted households believed they had no alternative but to pay for debt advice.

"The recent Office of Fair Trading (OFT) report shows that the fee-charging debt management sector is not fit for purpose. It is vital that the OFT steps up its vigilance of the marketing practices of the fee-charging sector to ensure they do not trap people into using their services in the belief that there is no alternative."