In Great Britain, PriceWaterhouseCoopers has said that more and more people are declaring bankruptcy at an increasing rate, however the number of people who are declaring bankruptcy isn’t increasing at the rate that was expected.

In February 2009, 67,428 people declared bankruptcy and another almost 40,000 people decided to turn to Individual Voluntary Arrangements in 2008. The total for the entire United Kingdom of people who had filed for bankruptcy protection was just over 106,000 people.

There were plenty of financial analysts that were expecting there to be more than 130,000 people in the United Kingdom that would have filed for bankruptcy or for the Individual Voluntary Arrangements by the end of 2008.

The only reason that there weren’t more IVAs taken out was because (as analysts believe) people were taking out a second mortgage on their homes. When someone gets a secured loan such as this one, they are no longer eligible for an IVA. This would also account as to why there are more repossessions in the United Kingdom this year. When someone puts their house up as collateral, then it is going to be taken by the creditor when that person decides to default on the loan, or they can no longer pay on the loan.

In the final quarter of 2008, more than 13,000 houses were taken back by the bank. This number is quite likely to go up in 2009 as more mortgages are expected to be underwater by the end of the year

In April 2009, the Debt Relief Order was introduced by the United Kingdom government. It was meant to help those who are having serious debt issues with small incomes. The people that it helps are those who have very few assets (less than 300 British pounds in value) and a disposable income of under 50 pounds a month. It will also only help those who owe less than 15,000 pounds.

Of course, there are plenty of options out there for those who want to and have the intentions of fixing their debt issues. One does not have to merely fall into that small gap to qualify for debt relief. This is where the IVAs come in. With an IVA, someone can keep their home and go through a process to help alleviate some of their debt issues. Again, there are certain stipulations to this kind of debt relief as well, but it isn’t as stringent as the DRO from the government.

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