UK bailiffs look to collect £24bn in 2008

Thursday, 15 November 2007 12:00

The UK debt crisis is set to worsen in 2008 with as much as £24.3 billion worth of debts passed on to the debt collection industry.

New figures from the Credit Services Association (CSA), which represents the debt collection industry, reveals some £22.7 billion will be collected in 2007.

Projections for 2008 stand between £23.9 billion and £24.3 billion - although the CSA warns it could well be higher.

"Over-indebtedness will be accelerated by more fixed-rate mortgages becoming variable at higher rates and access to new credit becoming harder," a CSA spokesperson said.

The situation is expected to worsen following rises in inter bank interest rates and the increased losses from the US sub-prime crisis making lenders more cautious about who can borrow for both mortgages and personal loans.

"Consumers are tightening their belts against the background of a credit squeeze and access to credit is becoming increasingly difficult as lenders tighten their lending scorecards," said the CSA.

The amount of debt passed on to debt collection agencies has risen from £5.2 billion in 2000 to £21 billion in 2006.

UK consumers now owe £1,380 billion in mortgages, loans, credit cards and overdrafts, according to Bank of England figures.

Last year Citizens Advice helped 1.7 million people with debt troubles, a rise of 20 per cent - with credit card and personal loan problems accounting for 40 per cent of all cases.

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