Falling property prices and multiple marriages have been cited as reasons why the over-45′s are suffering the most with debt problems.
The number of individuals suffering with debt management issues and going bankrupt in the over-45 age range rose by 124% between 2004 and 2008, according to latest research.
The report by accountancy firm Wilkins Kennedy showed that during this period, individual bankruptcies in this age group increased by 124% – from 10,600 to 23,800 – compared to an overall rise of 89% over the same time.
This marks the biggest rise in bankruptcies and has been put down to a growing number of individuals suffering from declining property values and the burden of multiple failed marriages, which leaves them increasingly vulnerable to the economic downturn.
Twenty percent of people divorcing in 2007 had a record of a previous failed marriage ending in divorce, against just ten percent in 1980. This places huge strain on finances and debt management as there are numerous commitments to consider alongside mounting debt problems.
Anthony Cork, director of Wilkins Kennedy, said: “By the time people hit 45, many will have established a second or even a third family with additional numbers of children and ex-wives or ex-husbands to support financially.
“This could mean people are having to help pay off part of the mortgage for their ex-husbands’ or ex-wives’ home, contributing to expensive child care and maintenance costs whilst paying for a second set of school fees and mortgage payments from a new marriage.”
The recent collapse of the housing market has also meant that those who had previously turned to their homes for finance in times of crisis were now finding they had less equity available, or were simply unable to remortgage, causing further debt problems.
Debt advice organisations have voiced their concern for people in this age group.
Ivan Cooper, Chairman at leading debt management firm Chiltern, said: “People over 45 will often already have bought a home or may have children to support from previous relationships, so automatically their finances need to accommodate these costs.
“Now that re-mortgaging is no longer a viable option for many people – due to falling equity levels and stricter lending criteria – people are having to consider alternative debt management solutions to alleviate their debt problems.
“If property prices continue to fall and the unemployment rate continues to rise, these debt problems may get worse – especially if they don’t seek impartial debt advice sooner rather than later.”
Debt help organisations offer a number of ways to alleviate debt problems and ensure people can regain control of their accounts and that financial commitments can be satisfied.
In many cases, the debt help offered may involve simple budgeting and debt advice, but in some circumstances a professional debt management solution may be required.
Professional solutions include Debt Management Plans (DMPs), Individual Voluntary Arrangements (IVAs) and Trust deeds amongst others.
For immediate debt advice, or for further information on a full range of professional debt management solutions, please call the number at the top of this page.
