Budget Briefing 2020 – Personal Debt

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January is a never-ending month, with the fallout from Christmas often continuing to pinch pockets.

However, whilst the joys of Christmas may well and truly be behind us, the cost continues to follow many people into the New Year.

It’s hard to escape the stories in the press stating that personal debt is at worrying levels and unfortunately, this is not untrue.

According to a report issued by Credit Connect: “Unsecured debt hit a new peak in 2019 according to TUC analysis. Meaning that the average household debt is now 31% above its peak, before the financial crisis”

The rate of personal debt impacts lending, interest rates, GDP and of course consumer spending. The potential ramifications of an ever-inflating ‘debt bubble’ have many industry experts fretting and in turn, their forecasts impact the markets in which UK businesses operate.

Getting out of debt is no easy feat and sometimes it is simply not possible. When a company is facing financial difficulty, business owners need to be very careful of exposing themselves to allegations of wrongful trading.

Wrongful trading is when a business, despite being insolvent, continues to trade. This is usually because the business owner believes that things will get better, and although this is a misguided view, it can have a knock-on off effect on creditors. If the position of creditors is worsened by these actions, there is a potential for the directors to be exposed to potential personal liability and disqualification.

If you think you need some advice, it’s always worth a getting in touch.

Call –0800 009 6106

Email –hello@myinsolvency.co.uk

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