Less people becoming insolvent in the UK … Is it really true?

According to the latest reports released, it has come out that the number of people becoming insolvent in the UK has actually reduced by 11.3% in the year 2011 as compared to the year 2010.

While this may indicate that the financial situation of the citizens has become better owing to the robust growth of the economy, the truth however is something else than it actually appears.

When we delve deeper into the subject and analyze the actual cause of the reduction in bankruptcy figures, a shocking truth is revealed. It has been found out that due to the increasing number of people refraining from declaring themselves bankrupt and instead opting for other solutions, these figures seem to have fallen.
This does not in any way indicate that debt problems in the country have reduced.

The main reason for people not declaring that they are bankrupt is the high cost of doing so which stands currently at seven hundred pounds. So instead of shelling out this huge amount, people are usually going in for informal debt management plans.

Since these arrangements are informal in nature a solid data about the actual number of people opting for the same is not available. But this fact can be proven by the rising number of companies offering these debt management services.

Thus, the headlines make for a great reading and appear hopeful but do not throw full light on the debt problem which is being faced by the people and in reality the number of insolvencies continues to rise.

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