WIGAN is facing a debt crisis as record numbers of people go bankrupt.
Hundreds of people have been forced to declare themselves insolvent and the expert predictions are that it could get even worse in the months and years to come.
Figures from leading accountancy firm RSM Tenon reveal that Wigan has been harder hit by the economic downturn than most towns and cities.
It says the borough saw a rise in personal insolvencies in 2010, with an estimated 844 cases reported, compared to 826 cases in 2009. That is a two per cent increase and means that, since the start of the credit crunch in 2008, local insolvencies have risen by 35 per cent – much higher than the national average of 28 per cent.
But the number of people in financial trouble is even more alarming.
In 2009, Wigan’s Citizens Advice Bureaux helped 77 people owing a total of £3.1m through bankruptcy. Last year that number had shot up to 203, who owed a staggering £4.5m, and the volunteers dealt with many other inquiries about bankruptcy besides.
The CAB also helps people with money worries to reschedule debt: bringing payments down to manageable proportions, freezing interest and going through clients’ income and expenditure to sort out a priority budget.
This they did, with 338 people owning just over £4m in 2009. In 2010 they helped 495 people with nearly £8m worth of debt.
The average amount owed by bankrupts helped by the Wigan and Leigh bureaux was £22,000 and last year the charity’s local branches also helped a further 23 people owing on average £15,000 through the new debt relief orders. DROs were introduced in 2009 and are an insolvency procedure for people on lower income and with fewer assets.
The CAB figures do not include individual voluntary agreements, which are another form of debt management which avoids bankruptcy.
The bureaux district manager Christopher Harris said: “This is a rising trend that I can say, hand on heart, is going to get even worse.
“What you have to bear in mind is that there are a lot of people in negative equity with whom the lenders have been lenient to date. But we are hearing from the agents of lenders in the county court that the lenders cannot hold off.
“This is an extremely difficult time already. If you mix the credit crunch in with people borrowing through the financial products they were presented with, these situations were going to arise.”