Huge rise in number of women going bankrupt
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Rebecca Rutt looks at why the number of women going bankrupt has rocketed in recent years.
For the first time ever the number of women declaring bankruptcy is equal to the number of men. Is this because women now deal with their money differently? Or are they just getting a tougher deal from the recession?
Research from RSM Tenon shows that in the past four years female insolvency cases have risen by 43% to reach equal levels to men. Young women are being hit hardest with a 28% rise in cases for those under 35, compared to only 18% of men of the same age.
Mark Sands, RSM Tenon’s Head of Personal Insolvency, said: “This could be the result of a number of things including the effects of the public sector cuts - the public sector employs a large number of female staff - and an increase in women obtaining credit earlier in their careers, only to see their debt levels spiralling out of control at a much earlier age.”
When you’re made bankrupt all your assets, including your home and income, are used to pay off existing debts. Restrictions are placed on what you can and can’t do and you’ll get a black mark on your credit record so you can’t apply for new cards or accounts.
Anyone can apply for bankruptcy and a court will decide to approve it. Once this happens a trustee is appointed to manage your finances and you’ll have to hand over your bank and credit cards to them and your accounts will be frozen. Anyone you owe money to will then apply to the trustee to get this back, and they will give you money for necessary things such as food or travel.
Delroy Corinaldi, External Affairs Director at the Consumer Credit Counselling Service, said it had seen cases of very significant debt among female clients, with some £20,000 in the red.
He added: "Bankruptcy is just one solution. There are a number of others, including things like debt management plans, which help you repay your debt, as well as other things like debt relief orders and IVAs. For individuals that are struggling, understand that you're not alone. Go and get debt advice from a registered charity."
Debt relief orders are also getting more popular and were up to 29% (from 22%) in the second quarter of the year. They are an alternative to bankruptcy and are only available for people with debts of less than £15,000, few assets and a low income.
The rise in female insolvency cases is a sign of the changing role of women in the workplace, but also of the worrying levels of debt we are all getting into. Bankruptcy is a last-case scenario, but until things start getting better in the economy, it’s unlikely this figure will see much of a change.
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