What’s more, experts predict that with so many people and organisations already at borrowing limits, already rationalised and having over the last couple of years, pulled together all the available cash they could get their hands on, things may well get worse before they improve. With the banks reluctant to lend, even good businesses – profitable, well-run companies with skilled people and great ideas – are falling by the wayside.

All for the sake of cash. Cash flow – or rather the lack of cash flow is a major factor in taking many companies and individuals to the point of bankruptcy.

Advice from the experts is that, though the natural inclination when things aren’t going well is to sometimes stick your head in the sand and pretend it’s all ok, just thinking that your financial problems will disappear of their own accord is folly. Don’t kid yourself. If things have got out of control, not only do you need a reality check you also need some independent and professional bankruptcy advice.

Realise too that bankruptcy in the UK isn’t the end of the world. Whilst you may have to give up your assets and even your home, as well as have financial restrictions imposed, such as the ability to obtain credit, often a bankrupt can be discharged and freed from debt liability in only a year.

In some cases there may be other less restrictive options such as IVAs (Individual Voluntary Arrangements) or (in the case of smaller debts) Debt Relief Orders that may be more suitable. If you really have run out of cash though and can’t see anyway of raising it to pay off your creditors then bankruptcy may be your best choice.

For all the latest rulings, legislation and advice on bankruptcy UK, consumers have a whole range of agencies ready and willing to offer the necessary guidance. Make sure you take the proper professional advice you need.

No wonder that debt advisors and professionals skilled at setting up debt management programs are in such high demand.. UK consumer rights organisation the Citizen Advice Bureau says its debt advisors are dealing with over 9,000 new debt management advice enquiries every day.

In many ways these people are the fortunate ones. Those that have realised that they may need help, are already seeking debt management programs and are on the path to dealing with and managing their financial problems.

For people who either fail to appreciate the realities of their financial situation or simply choose to ignore what’s going on, a real and present danger exists that debt will start to spiral out of control. Without careful handling a vicious circle of debt is created and you can find yourself forever playing catch up – robbing Peter to pay Paul.

In the long run the chances are that they will be forced to seek debt help anyway. Grasping the debt nettle before things get too out of hand can save you a great deal of time, anxiety AND cash. It will also open up more flexible, less restrictive debt management options such as IVAs or Debt Relief Orders – preferable to bankruptcy for many people.

Are you looking for debt advice? UK consumers have a wide range of organisations to turn to. Make sure that if you feel you need some guidance that you seek out expert, independent advice and start getting to grips with your debt as soon as possible.

If you have financial problems then take consolation from the fact that you are far from alone. Figures reveal that as many as 1000 people a day are seeking some form of IVA help or formal debt rescheduling plan.

One of the most flexible options for dealing with debt, an IVA (or the Scottish equivalent the Protected Trust Deed) is often a preferable alternative to bankruptcy for those in serious debt. For example, an IVA or Protected Trust Deed is more flexible, helps you avoid the restrictions of bankruptcy and protects your assets unlike bankruptcy.

In setting up an IVA you need to organise a legally binding timetable with your creditors in which to clear your debts, usually over a period of 5 years. At the end of the period, as long as the agreed percentage (usually somewhere around 50% of their original debt) has been made, any outstanding debt may be written off.

In order to qualify, you will need to meet the following requirements:

• You must have at least £15,000 of unsecured debt
• You must be able to pay at least £200 a month into the IVA
• You need to owe money to three or more. creditors.
• You need to have a regular income

Though an IVA can be an effective way of avoiding bankruptcy if you fail to maintain payments or default on the arrangement you may end up being declared bankrupt.

IVAs have been around for a while now so these days IVA help is plentiful and professional. If you think an IVA could help then seek advice. Make sure though that you take the necessary professional and independent advice before committing.

Debt management is exactly what it says it is – managing your debts and getting them back under control. The first step is to realise that you can’t let the situation carry on in its present state any longer and to sit down, with a debt management expert if necessary or speak to the national debt helpline, and take a good, hard look at your finances. Make a list of your major creditors and then get in touch with them. By contacting them and informing them of the situation, not only will they be more willing to negotiate more manageable repayment terms, but you will also prevent them from sending you those dreaded final demands every day.

Work out your outgoings as compared to your income, but remember that you have to leave yourself something to live on otherwise the spiral of debt will get worse. Prioritise your creditors (don’t forget the little guys, but at this stage your major creditors take priority) and allocate a certain amount of your income towards paying them off first. You may not be able to write off debt but once things are on a more stable footing and you’ve taken control back, it’s easier to work out payment plans that will help you to clear the debt more quickly.

If all of this seems daunting and you’re still in a panic about managing your finances, talk to an independent debt counselling service. They’re specialists in debt management and may know some ‘tricks of the trade’ to help you control your money in a more manageable way. Never be afraid to ask for help.

An Individual Voluntary Arrangement is a contract between you and your creditors. You pay an agreed monthly sum, usually for 5 years. This is divided up between people you owe money to, who accept the sum in settlement of the amount you owe them. Once the term of that IVA is over, you have the chance to start afresh without the impact declaring yourself bankrupt can have over the long term. Unlike bankruptcy, an IVA does not prevent you from running a business so if you want to start up your own business during the term of the IVA, you can. It could be a way of getting yourself out of debt and back on your financial feet much more quickly.

The first step is to get some IVA debt help – speak to the national debt helpline or to any one of the specialist IVA companies in the UK. In essence, IVAs restructure your payments to creditors so that they become more realistic and effective, putting you back in control of your finances. By opening the lines of communication and sticking to an agreed repayment plan, you reduce the amount of pressure that is often placed on those in debt by their creditors, making life much more manageable.

Bankruptcy is a last resort debt solution and, even though it has become more common particularly during the recession, it still carries a certain amount of social stigma and does invariably affect your credit rating for years afterwards. An IVA helps you avoid this unenviable situation and prevent it from becoming a millstone around your neck for years. Talk to an impartial debt advisor if you think an IVA may help you control your debts.

Frightening statistics. And if you don’t believe the recession is as bad as the headlines have been making out, consider that if the number does increase to 411 per day declaring insolvency or bankrupt, that will mean an incredible 150,000 people could be declared bankrupt by the end of the year. That’s the size of a medium sized town. Bankruptcy seems to be presented as an easy option to take if you get into difficulty financially. The attraction of not having to pay creditors and effectively write off debt may be tempting many to sign on the dotted line and bankruptcy doesn’t seem to have the social stigma that it once attracted.

But there are significant drawbacks of declaring yourself bankrupt. Your credit rating will be seriously damaged. Of course, if your financial circumstances are severe enough, you may not really care that much about your credit rating and simply need immediate help managing debt, but it can have lasting consequences even years afterwards. Your financial history may also impact your chances of applying for certain jobs, particularly in the banking and finance sector. Let’s be honest – would you take financial advice from someone who’s been declared bankrupt?

Finally, it can seriously damage the finances of those you owe money to. So not only is your financial situation affecting you – like ripples on a pond it spreads out into the wider community. Obviously, the best option is not to get into such a financial pickle that you have to consider bankruptcy in the first place. But if you are in trouble, and before you reach for the insolvency paperwork, talk to a professional debt advisor who may be able to show you an alternative that keeps you in business, trading and financially viable.

Credit card debt

One of the primary causes of the economic recession was the ease with which ordinary people could run up thousands of pounds of debt on ‘easy credit’. Total credit card debt in July 2009 was £53.9bn, and with the interest charges on credit cards being higher than the base rate by a considerable amount, credit card debt is a growing problem. Many people solve runaway credit card debt by looking for debt consolidation help.

Unemployment

One in 33 people in the UK is facing unemployment in 2009. The financial buffer of a regular income can be ripped away very quickly and because savings are at an all-time low in the UK, very few people have the money put by to cover themselves in case of unemployment. Losing your job can mean rapidly mounting debt in a very short space of time. If you lose your job and can’t make your payments you need to act quickly; start with government debt advice – they can recommend an appropriate debt management solution.

Illness and divorce

Illness can put you out of work for the long term, and even if you keep your job you will only be eligible for statutory sick pay – a far lower amount than your usual income. Divorce and separation can also be a financially trying time leading to debt, as people have to reassess their lifestyle and their outgoings. A good debt management service will understand the implications that personal problems can have on debt.

Poor financial management

The ‘dripping tap’ effect, poor financial management and a temptation to adopt an ‘ostrich’ syndrome to mounting debts won’t make the problem go away. Perhaps one of the easiest areas to tackle, poor financial management can be quickly turned around with the right debt advice and help.

Failure to maintain credit agreements

If you are committed to credit agreements and you fail to maintain your end of the bargain, the interest charges can start to mount up. Creditors will start chasing for payment (and charging you for the privilege), but again, this is an aspect of financial management that can be tackled relatively easily to get you back on track.

1. Admit there’s a problem
Ignoring mounting debts and hoping that they’ll either ‘magically’ go away if you don’t admit to them or spending most of your time desperately worried about coping is not the right way to manage a debt problem. To take control, you first need to admit that there is a problem.

2. Get professional debt advice
Trying to solve the problem on your own will be difficult if not almost impossible. If you are in debt, there are things you can do to drastically reduce the problem that a debt counselling expert will be able to tell you about. They spend their entire careers helping people get out of debt every day, and having that expert advice can make all the difference in a financial crisis. So as soon as you realise that there is a problem, get in touch with an impartial debt advice service who will be able to sit down with you and help you plan a strategy to take back control of the situation and get you out of debt.

3. Have a plan
A debt advisor will be able to help you put together a debt management plan that, if you stick to, can mean that you’re debt-free far more quickly. But for that plan to work, you have to stick to it. By informing your creditors of your situation and drawing up voluntary agreements with them to repay the outstanding amount over a longer period of time but with smaller, more manageable payments, for example, you can avoid the bankruptcy route and problems with credit later on.

Because credit cards, ‘interest free’ credit and other financial carrots were dangled in front of an eager and willing public for so long, many people have found themselves seriously overstretched financially when the doors slammed shut on the easy credit culture of the 90s and as a result more and more people are looking for debt management solutions or even ways to write off debt. A far more cautious financial market is now less willing to repeat the same mistakes of that boom time and is coming down hard on those in financial difficulty. Despite billions being pumped by the Government into the banking industry, there has been very little trickle-down effect to the ordinary consumer, leaving them in as much financial trouble now as at the start of the crisis, and consequently many are seeking debt solutions from IVA companies and debt management services. 

The headlines may claim that the green shoots of recovery mean an end to the current financial crisis. But the aftershocks of one of the worst meltdowns in banking history are still affecting ordinary people with mounting debt problems. The average household debt in the UK (including mortgage repayments) is over £58,000. The average owed by every UK adult is £30,188 (including mortgages). This is 130% of average earnings. So it’s obvious that personal debt is still out of step with income, meaning that the after effects of the recession are set to continue for some time to come.

The boom time of the 90s saw hundreds of thousands of ordinary people gain increasing access to easy credit. Store cards, credit cards, ‘interest free’ loans – the list was endless and specifically designed to attract the ordinary man and woman in the street. As the public began to pile up debts, the banks realised that it was only a matter of time before a tipping point was reached and the unsecured financial loan chickens came home to roost, with many people now seeking ways of managing debt or even ways to write off debt entirely.

While the headlines may optimistically state that we’re now climbing (albeit slowly) out of the recession, it still continues to affect thousands of borrowers hard. We’ve just come out of an era of spend, spend, spend. Savings are practically non-existent, and the collapse of the banking industry has wiped out what little savings many people had. Without that financial cushion to fall back on, debt has continued to mount as people rely on credit cards and other high-interest loans to make ends meet.  No surprise then that IVA companies and other forms of debt management solution are increasingly in demand.

The charity Credit Action has shown that total UK personal debt at the end of July 2009 stood at £1,457bn. Although the increase in this enormous sum of money has slowed recently, it’s still a massive debt that will probably never be repaid in full. The financial forecast is still decidedly chilly for average consumers and while we may not be actually bankrupt as a nation yet, unless the wheels of industry start to move again across the world, it is still a spectre on the horizon. However, if you’re looking for debt help there is good news in the shape of the national debt helpline and other debt counselling services – they can offer independent debt advice and strategies for dealing with your debt.