Over the past few years many people that did not have any significant debt have found themselves lumbered with debts such as credit cards, store cards, and loans, having struggled to manage on their income during the last couple of years, which have been financially turbulent.

At the same time many people who were already in debt have found themselves even deeper in debt, having struggled to keep on top of their debt repayments and to keep on top of other financial commitments. This has left many households in a very difficult financial situation, and despite the fact that the recession is now officially over things are not set to improve any time soon.

In a recent report a financial industry expert, Chris Tapp from Credit Action, has stated that personal debt levels in the UK are set to remain high for the foreseeable future, as many people are still struggling with their finances and therefore do not have the resources to tackle their debts and make repayments on the money that they owe.

Although the credit crunch has resulted in a tightening of lending criteria amongst banks and other lenders, which means consumers are less likely to get finance and accrue debt, many are struggling to pay existing debts because of factors such as reduced working hours and job losses.

Mr Tapp also added that the increase that has been seen in unemployment levels could make debt problems worse, as consumers turn to sources of alternative funding such as credit cards and overdrafts in order to make ends meet.

Tapp stated: “I think we will still continue to see personal insolvencies very high for some time until employment begins to filter back into the system and more people can get back into jobs.”

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