The large rise in the number of bankruptcies and IVAs is down to a culture of borrowing to the limits of affordability, according to an insolvency expert at Grant Thornton.

Mike Gerrard, who heads up the insolvency department at the firm, told Business Credit Management that factors such as rising fuel costs and unemployment leave people who are heavily stretched unable to adjust.

He said the rise in insolvencies was "sustained by the side effects of the buy-now-pay-later generation".

Referring to credit card borrowing in particular, he said: "It is unsurprising that with so many individuals borrowing so much money, increasing numbers are defaulting on their payments and getting into financial trouble."

Last week the Debt Counsellors released figures which showed that credit cards were a factor in 91 per cent of bad debt cases and store cards in 41 per cent.

If you have missed any credit card repayments your credit rating may be damaged. Order your credit file now and find out.




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