National money education charity Credit Action today revealed that one person is declared insolvent or bankrupt every 60 seconds during the working week.

Based on statistics gathered in the third quarter of 2011, the charity estimates that 331 people are made insolvent or bankrupt every working day and 101 properties are repossessed every day.

The current high level of unemployment is a major factor in tipping people into debt and between August and October 2011 1,764 people a day were made redundant.

The average household debt in November, excluding mortgages, fell slightly to £7,982 in November from £7,995 in October.

When mortgages are included, the average household debt increased slightly to £55,816 in November compared with £55,815 in October.

For the UK as a whole, personal debt totalled £1.451 trillion at the end of November 2011, with £173 million being paid daily in interest alone.

Michelle Highman, Credit Action’s chief executive, advised people experiencing financial difficulties to seek free advice from Citizens Advice or the Consumer Credit Counselling Service.

Last month the Insolvency Service reported a worrying trend for record numbers of young people to become insolvent.

Young people are increasingly turning to Debt Relief Orders, a type of insolvency only introduced in 2009, which wipes out debts after a year unless there has been a change in personal circumstances.

There is a fee of £90 and no need to go to court but although this seems like a quick and cheap solution, the holder of a Debt Relief Order will be unlikely to be able to secure a mortgage, credit card or loan for six years.

Debt Relief Orders are only available to people with debts of less than £15,000, who don’t own their own home and have less than £300 in savings or other assets.

Although people who have been made bankrupt are legally allowed to hold a bank account, in practice most banks refuse to allow an undischarged bankrupt to open one.

This reluctance is because of the risk that a trustee could pursue the bank for loss of money following a bankruptcy.

However, the lack of a back account can make life very difficult when it comes to paying bills, receiving wages and managing finances generally, while being forced to use cash can result in additional expenses being incurred.

In July last year Citizens Advice published a report suggesting that the current situation was causing undischarged bankrupts undue hardship.

The Insolvency Service has therefore launched a 12-week consultation into improving financial access for undischarged bankrupts.

It is considering a number of options, including establishing a voluntary code for banks to agree to give bankrupts access to basic bank accounts, and developing guidelines for trustees in bankruptcy.

If non-statutory measures prove ineffective the Government may legislate on the issue.

There are currently just two high street banks which allow undischarged
bankrupts to open basic accounts.

Business Minister Edward Davey said: “Access to a bank account is an essential stepping stone to help people manage their finances and to get them back on track after facing up to their financial difficulties.

“Without access to a bank account, even the simplest financial transaction is beyond reach for an undischarged bankrupt.

“What I want to see are financially capable consumers who are able to effectively manage their money, and make the fresh start they need.”

The latest figures from the Government’s Insolvency Service show that the number of people declaring themselves bankrupt has fallen 31 per cent year on year.

One of the factors in this fall is believed to be the high cost of declaring bankruptcy.

It costs £700 for an individual to declare themselves bankrupt and this has to be paid to the court immediately, although the cost can be reduced to £525 for people on low incomes.

The economic crisis has had a worryingly negative effect on Greek citizens’ health.

British medical journal, The Lancet, published an article today outlining how the country’s decline and economic downfall has been hitting Greeks’ health hard. The report also mentioned that violent crime and drug use had been on the up since 2007.

According to Greek health authorities, the rate of suicide in Greece rose 17 percent in 2009 compared with 2007. The first part of this year has seen a 40 percent rise in suicides when compared to the same period in 2010. The country’s suicide help line say that a quarter of those who call them are experiencing financial difficulties.

The journal also says that data suggests the rate of HIV infections will rise by 52 percent in 2011 compared to last year. This was explained by more Greeks turning to heroin, the rate of the drug’s use rising by 20 percent since 2009.

The report also said that more are turning towards prostitution and sex work as a way of making an income during the crisis, worsening the rate of infection.

The number of clinics aiding people with drug addiction or health problems has been reduced due to budget cuts. Additionally, the financial incentive to avoid a doctor’s visit is proving greater than the need to check up on one’s health.

So, Greece’s debt ridden are now essentially paying back their loans with their health.

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