http://www.telegraph.co.uk/news/main.jh ... w_05082006

Britons go bust at rate of one per minute
By Edmund Conway, Economics Editor
(Filed: 05/08/2006)

One person is falling victim to insolvency every minute of the working day and home repossession applications show the biggest rise since the early 1990s housing crash.

The Government figures issued yesterday, 24 hours after the Bank of England raised interest rates for the first time in two years, show that more and more families are being caught up in the ballooning debt crisis.
Experts said that many families were finding it impossible to pay record gas and electricity bills, mortgage payments and council taxes and thousands were now throwing in the towel on their finances.
The Insolvency Service said that 26,021 people became insolvent between April and June. That brought the total so far this year to 49,674, with the figure expected to pass 100,000 by January. The City fears that the record £1,200 billion mountain of debt could cause a serious downturn in the economy.

Figures from the Department for Constitutional Affairs showed that the number of lenders' applications to take possession of defaulters' homes was 33,180 in the second quarter - the highest since 1992. Although many families cling on to their homes by reaching a deal with creditors, the Council of Mortgage Lenders said the number of repossessions in the first half of the year was up by 76 per cent to 8,140. Further increases are expected.
The jump in insolvencies is largely attributable to the growing popularity of Individual Voluntary Arrangements (IVAs), an alternative to bankruptcy. The number of people entering IVAs to clear their debts has rocketed by a record 153 per cent to 11,105 in the second quarter of this year. Consumer groups say that debt companies are pushing IVAs very aggressively.
Cases of bankruptcy, which imposes harsher penalties on debtors, dropped by 3.3 per cent to 14,915 in the three months to June.
The consultants KPMG said that about 800 of those who entered IVAs in the past three months did so with more than £100,000 of unsecured debt, such as credit cards, overdrafts and personal loans. Mark Sands, the group's director of insolvencies, said the number of insolvencies could reach 150,000 next year.
"If people think this is temporary, they have been misled," he said. "We are entering a new era where personal insolvency is going to be an accepted part of everyday life. In the past few years there has been a complete change in people's attitude to credit and banks' attitudes to people reneging on debt."
Consumer groups have strongly criticised the major banks, five of which declared combined half-year profits of around £20 billion this week. Politicians have also questioned banks' increased spending on marketing loans.
The banks have had to increase the provisions they are making for bad debts.
Eric Daniels, the chief executive of Lloyds TSB, said:"Twenty years ago a debt was something that people would naturally repay. Today, advice is being given to students that the minute they graduate they should default. It is a huge societal change.''


SO IT ISN'T JUST US SUFFERING........THE WORLD BANK SEEMS TO BE TAKING CARE OF EVERYONE, AREN'T THEY?