Personal bankruptcy is set to soar
As the UK housing market comes under more and more pressure we are seeing an increase in personal bankruptcy with a number of homeowners literally walking away from their debts and declaring themselves bankrupt. As we have covered the last few days, over 40,000 people were evicted from their homes in 2008 and this figure is expected to mushroom in 2009.
This has led to something of a surge in debt management advertising, both on the TV and in newspapers, which has opened many minds to the fact that there are alternatives to facing the stress and pressure of a personal financial meltdown. However, the government has also instigated an investigation into the debt management sector with concerns that many people are being made promises which cannot be delivered.
It will be interesting to see how the banks react to the ever-growing number of personal bankruptcies which are often very closely connected to the housing market. Do they offer assistance to those in arrears with their mortgage or do they reclaim their homes as quickly as possible and sell them on the open market?
Despite government assurances that those in arrears with their mortgage will be given "breathing space" there has been little sign of this so far in the UK with many homeowners being left with substantial debts even after their properties have been sold. The UK housing market is certainly affecting many of the UK population and a great number will be paying the price for many years to come.
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