More going bankrupt, figures show
Published 30/12/2010 | 13:52
The number of people going bankrupt in Northern Ireland has more than trebled over the past decade.
The legal step is increasingly seen as the only option by people overwhelmed by credit card and mortgage debt.
A total of 1,250 people declared themselves bankrupt this year compared to 331 in 2001, the Department of Enterprise, Trade and Investment confirmed.
Ulster Unionist Assembly member David McNarry, who obtained the information, said: "In many cases bankruptcy now seems, despite the shame, an easy option for people just to get rid of their debts.
"I am aware of the pressures people in business are feeling and not being able to manage their credit ratings with their banks and having to put their houses up as collateral. At the end of the day they just feel they have nowhere else to go but make themselves bankrupt."
Some people declare themselves bankrupt and others are made bankrupt when a creditor owed money petitions a court. The effect is serious, with bankrupts prevented from running a business or obtaining significant sums of credit. It takes several years to restore credit ratings.
A spokesman from Debt Advice Northern Ireland said: "Many people see bankruptcy as their only choice when struggling with their debt problems. Bankruptcy is not your only choice. Depending on your circumstances you could meet the criteria for an individual voluntary agreement or debt management plan."
Cuts to a scheme which helps unemployed people with mortgage payments could lead to thousands of repossessions, a finance advice agency has warned.
The Support for Mortgage Interest (SMI) scheme is calculated at a fixed 6.08% figure, but June's emergency budget reduced this to 3.63% from October. SMI is now calculated in line with the Bank of England's published monthly average mortgage interest rate.
Advice NI warned this would leave many "at risk of plunging into arrears and ultimately losing their homes". It said 7,000 NI households claiming SMI faced mortgage interest shortfalls.