Fears for increasing household debt in 2022

By Mr Bankruptcy

31st January 2022

It looks as though 2022 is going to be a challenging year for many households, with several financial changes putting pressure on household’s budgets.

I take a look ahead at the possible problems we could be facing and what households should be doing right now to prepare for them.

Stormy financial seas ahead

It seems you can’t go a day without the next financial crisis making headline news, all of them combining in a perfect storm that will impact the financial security of ordinary households as well as businesses. Over the next few months we’re likely to experience:

What will be the economic impact on our pockets?

The breadth of financial change means few of us won’t feel some impact on our pocket. Rising costs in raw materials and energy, in conjunction with supply issues, will push up consumer prices.

Energy cost could rise by as much as 50% and such dramatic increases in costs have led the Bank of England to forecast inflation peaking at about 6% in 2022, three times its 2% target. Interest rates are also starting to rise, so mortgages loans and credit cards will also begin to cost more.

Rising costs, combined with increased National Insurance and stagnant wage levels, means many people will see an effective fall in their standard of living, with households expected to see an income drop of 1.7% in real terms this year. This is likely to result in a rise in household debts as many struggle to cover daily costs and the increasing cost of credit.

Be proactive about your finances

With over one fifth of UK households holding less than £100 in savings, they have little to cushion themselves against the financial challenges on the horizon. People need to shop around more to find cheaper options and the best deals to make their money go further. They also need to be more aware of their own financial situation and manage their budget more realistically, which may mean drawing in their horns and shedding liabilities.

In this business I often see the temptation to put potential financial problems to the back of the mind and hope the situation resolves itself, but it rarely does. Being proactive and acting early is essential to keep yourself out of long-term financial difficulties.

Debt is often difficult to talk about but seeking support and advice is the first step to take if you are feeling overwhelmed. With the likelihood of financially challenging times ahead, it will be a step many will be taking soon.

James Rosa Associates

James Rosa associates is a firm of debt advisors and debt adjustors. With a supportive, non-judgemental and friendly approach, we offer a full range of advice and professional services to individuals and business owners/directors who face unmanageable debt or who are involved in civil or commercial disputes. Our services include:

We are authorised and regulated by the Financial Conduct Authority (FRN665061) to work with clients to produce bespoke solutions to fit their specific circumstances.

Find out if you qualify for a free consultation

If you want to deal with an unmanageable debt, or bring a dispute to a swift and cost-effective resolution, contact James Rosa Associates, ring 0845 6807217 or email enquiries@jamesrosa.co.uk to find out whether you qualify for a free consultation.

What’s changing with winding up petitions?

By Mr Bankruptcy

18th January 2022

The government has introduced a raft of measures during the covid pandemic to protect businesses, including a halt to winding-up petitions against viable businesses. From 1st October changes to winding up petitions came into effect, so what are the implications for businesses?

What restrictions were originally imposed during lockdown?

While the restrictions were in place, creditors were temporarily prevented from doing the following:

What has changed?

The changes to winding-up petitions that came into effect on 1st October have relaxed the restrictions and now creditors can serve a statutory demand to demonstrate that company’s insolvency due to its inability to pay its debts. They can also present a winding-up petition if a business fails to satisfy a statutory demand, but certain conditions are still in place:

These new restriction on winding-up petitions will remain in place until 31st March this year.

What does this change mean for debtors?

For outstanding debts of more than £10,000, creditors do not now need to show that the pandemic did not have a financial impact on the debtor. So, if the criteria above are met, even if the pandemic is stated as the reason for not repaying the debts, the creditor can proceed with presenting the winding-up petition.

This relaxation of restrictions means that it is more important than ever to start engaging with creditors to reach arrangements for repaying debts and, where necessary, to seek expert advice on preventing the commencement of a winding-up petition.

James Rosa Associates

James Rosa associates is a firm of debt advisors and debt adjustors. With a supportive and friendly approach, we offer a full range of advice and professional services to individuals and business owners/directors who face unmanageable debt or who are involved in civil or commercial disputes. Our services include:

We are authorised and regulated by the Financial Conduct Authority (FRN665061) to work with clients to produce bespoke solutions to fit their specific circumstances.

Find out if you qualify for a free consultation

If you want to deal with an unmanageable debt, or bring a dispute to a swift and cost-effective resolution, contact James Rosa Associates, ring 0845 6807217 or email enquiries@jamesrosa.co.uk to find out whether you qualify for a free consultation.

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