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Screensize: 640 x 480 800 x 600 1024 x 768 1280 x 1024 UserName: Password: Format Mode: Basic  Help  Prompt  Format: Font Andale Mono Arial Arial Black Book Antiqua Century Gothic Comic Sans MS Courier New Georgia Impact Lucida Console Script MT Bold Stencil Tahoma Times New Roman Trebuchet MS Verdana   Size 1 2 3 4 5 6   Color Black Red Yellow Pink Green Orange Purple Blue Beige Brown Teal Navy Maroon LimeGreen Message: * HTML is OFF * Forum Code is ON Smilies [quote][i]Originally posted by BankruptcyNews[/i] [br]Bankruptcies soar to 10 a week THE number of people declared bankrupt in Edinburgh has soared to almost ten a week, as rising interest rates start to bite. Debt management experts today warned the problem will worsen as homeowners come to the end of fixed-rate mortgages and house prices stabilise. Lenders are also being blamed for "exercising their muscle" by forcing people into court to be declared bankrupt, rather than letting them pursue voluntary insolvency. The number of people declared bankrupt in the Capital has nearly doubled in two years. In the most recent financial year, there were 467 bankruptcies in the city, compared to 364 a year earlier. Most cases involved people struggling with credit card or loan debts, although the figures also included a few sole traders. Until recently, spiralling house prices - particularly in Edinburgh - have allowed thousands of homeowners to release equity in their property to pay off other debts. At the same time, banks and building societies have been handing out massive mortgages to buyers. But many home owners are now being hit by rising interest rate levels, currently at 5.75 per cent following five hikes over the past year, while a levelling-off of house prices makes it harder for owners to release enough money to cover their debts. John Hall, chief executive at Edinburgh-based firm Invocas, which sees the bulk of its business stem from personal insolvency in Scotland, said: "There are a combination of reasons for the rise. Increases in utility bills, and the effect of rising interest rates are starting to be felt. "Around 60 per cent of homeowners have fixed or discounted deals, so it takes much longer for the effect of interest rate rises to come through nowadays. "Many people may not think quarter-of-a-percentage rises are very much, but when they come to the end of their mortgage term, their interest rate could increase from four per cent to 6.75 or seven per cent. That's more than a 50 per cent rise, and could result in monthly payments rising from £800 to £1200." In the three months to June, Mr Hall said Protected Trust Deeds (PTDs) - a confidential arrangement between an individual and his or her creditors - had dropped by 15 per cent year-on-year, while the level of sequestration had risen by 23 per cent. A PTD can write off up to 90 per cent of a person's debts, and if they keep up the affordable monthly payments, they can be debt free usually within 36 months. But if someone is declared bankrupt, they will struggle to open a bank account, get a credit card, and their financial difficulties will be announced in public. "Lenders are exercising their muscle and have been objecting to people going down the voluntary route, which forces them into the court process," Mr Hall said. A spokesman for the Citizens Advice Bureau Scotland said bankruptcy was "not an easy option". But he said: "Debt is now the single biggest issue that the Bureau deals with. We are the most indebted nation in Western Europe. "For many people, bankruptcy is the only option because they will never be able to repay their debts." Source: thescotsman.com See my Blogs: http://bankruptcynews.blogs.bankruptcyhelp.org.uk [/quote]   Check here to include your profile signature.