Millions of UK consumers are getting themselves into deep financial hardship by making simple money mistakes that can be easily avoided. According to research one in 10 adults have considered declaring themselves bankrupt or taking out an Individual Voluntary Arrangement to help clear their debts with many of those having made basic financial mistakes that compounded their initial overspending.

For example, 10% had taken out a credit card to pay off another credit card, while a further one in 10 had missed payments on credit cards, store cards or mortgages. Other common errors included taking out a lengthy consolidation loan with a high interest rate to clear existing debts.

Recent Government figures showed personal insolvencies hit 30,075 in the three months to the end of March, up 24% on the same period a year ago. Bankruptcies were up 10% on a year ago with a sharp increase of 48% on the number of IVAs compared to the corresponding quarter in 2006. The recent rise in interest rates is expected to push more people towards debt problems.

There seems to be a serious lack of understanding of the long-term consequences of these actions and how it can affect your credit-rating – ultimately impacting your financial future. Eight out of 10 adults admit to overspending, with stress, arguments with partners or simply feeling low being the prime drivers.

If you are finding that your personal debts are piling up and you don't know where to turn, you could consider taking control by contacting us using the reply form - one of our expert Regional Advisors will then visit you personally to assess your individual circumstances and work out the best solution for you.

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Michael Clarke, This is Money, 14 May 2007
Artilce referenced from http://www.thisismoney.co.uk/credit-and-loans/debt-news/article.html?in_article_id=420321&in_page_id=62