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Bankruptcy and Homelessness Beckons for Thousands More in Wales
May 10, 2007 5:58 PM
As the Bank of England announces a further interest rate rise to 5.5% in order to try to control rising inflation, the Welsh Liberal Democrats have warned that thousands more in Wales are likely to be pushed towards bankruptcy or to have their home repossessed.
The Welsh Liberal Democrats have released figures showing that the numbers of people in Wales going bankrupt or taking out Individual Voluntary Arrangements (IVAs) are at record levels and rising rapidly.
The research shows that:
• Bankruptcies in Wales have more than doubled over the last four years.
• The number of people in Wales who declared bankruptcy so far in 2007 is nearly 3 times higher than at the start of 2003.
• The number of people in Wales who have agreed IVAs over the last two years has more than trebled.
• In 2006, the number of repossessions increased by 65% since 2005.
• 38% of people in Wales have re-mortgaged their home to pay off existing debt and mortgage affordability is at its lowest level for 16 years.
Commenting, Jenny Willott MP said:
"These figures are extremely worrying. This further rise in interest rates is likely to push many more people in Wales into financial chaos.
"Interest rate rises will mean that the average monthly mortgage repayment in Wales will have gone up by over £60 since August last year. This is only likely to increase the number of Welsh families forced out of their homes for being unable to meet their mortgage repayments.
"Over the last few years, the number of people declaring bankruptcy in Wales has more than doubled, while the number of people opting for risky IVAs as an alternative to bankruptcy has more than trebled in 2 years.
"Consumer debt continues to rise to record levels, the highest anywhere in the world, and in Wales many hard-working families are already seriously struggling to meet their existing debt and mortgage repayments.
"Thousands of people in Wales are in a very precarious position. If inflation continues to rise and interest rates continue to go up, the financial problems in Wales will only get worse.
"While everyone is talking about Blair's legacy as Prime Minister, it is equally important to look at Brown's legacy as Chancellor. For many people in Wales, his parting gift will be to leave them with crippling personal financial problems."
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