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July 2007

Shocking statistics have revealed that the number of couples facing bankruptcy is to reach an estimated 50,000 by 2010, according to research conducted by Manchester Business School on behalf of Haines Watts IVA Limited and its new consumer financial advice website goodbye2debt.co.uk.

The research found that the number of couples in England and Wales who applied for insolvency as they struggled to cope with spiralling debts increased to 13,000 in 2006, which represented a staggering increase of 165% since 2004. Worse still, the average level of debt per couple increased from £21,000 in 2004 to over £42,000 in 2006 and trends show signs of this increasing.

Dr Sydney Howell at Manchester Business School says, "Some of these couples, especially those in their early 30s, are facing a future with no pension, no savings and huge debts. Rising house prices and interest rates, ever increasing living costs and wages that have not kept up with inflation have all produced crippling debts and left more and more people turning either to bankruptcy or insolvency as their only way out."

These couples are just some of the unlucky victims of the mountain of personal debt in the UK, recently estimated by the Bank of England at nearly £1.3 trillion (£1,300 billion).

Gill Wrigley, Insolvency Practitioner for Haines Watts IVA Limited and founder of the new and impartial financial advice website, goodbye2debt.co.uk says, "We have been observing an increasing trend of couples applying for Individual Voluntary Arrangements, (IVAs) particularly in the last 12 months and my role is to find the most ethical solution for both debtors and creditors. For some couples, bankruptcy is the better choice, but for many an IVA gives them the chance of saving their home, keeping a credit rating, being allowed to run a business or even being allowed to work for a financial company ever again.

Gill continues: "Contrary to unscrupulous advertising from some debt solution companies, creditors will not write off 75% of the debt if the debtor can afford to pay more and so a well constructed IVA proposal should benefit both parties - false hope will result in one side or both worse off than they need be."

Couples formed just 10% of Haines Watts' IVA Limited clients in 2002 but this figure has grown to 40% and is showing no signs of reducing. Young couples, typically those turning 30 are vulnerable because they are in a transitional lifestage where they are settling down, buying a house and wanting to start a family, but still also spending a high proportion of their income on social activities.

Haines Watts IVA Limited has recently launched www.goodbye2debt.co.uk , a new website which is an indispensable portal for consumers to gain free, impartial and professional advice, as well as factual information on a wide range of debt solutions including IVAs, debt management, debt consolidation loans and bankruptcy. Goodbye2debt.co.uk. is affiliated with Credit Action, a national money education charity committed to helping people manage their money better.

The First Steps to Managing Debts - Advice from Haines Watts IVA Limited

1. Don't ignore the problem - it won't go away and the longer you leave it the worse it will get. Start today by opening those bills and seeing how much you owe in total then contact the creditor and explain your difficulties in meeting payments. You will be surprised at how willing they are to help.

2. Be wary of borrowing more money to pay off your debts as this may simply create a spiral of debt and make matters worse. Get advice first.

3. Prioritise the way you tackle your debts. Start with those debts that could lead to you losing your home, being evicted, having your gas or electricity cut off, or lead to fines.

4. Boost your income by claiming all the benefits you are entitled to: Could you claim Tax Credits? Are you sick or do you have a disability? If you are on a low income you may be able to claim a rebate on your rent and council tax. Tax credits are administered by the Inland Revenue: 0845 300 3900 (Great Britain); 0845 603 2000 (Northern Ireland). If you have lost your job, or are off work because of illness, check whether your payments are covered by payment protection insurance. Contact the credit company if you are not sure.

5. Get professional advice.

Advice Hotlines

Haines Watts IVA Limited 0161 200 6080

www.goodbye2debt.co.uk Tel: 0800 0730 449

Tax credits are administered by the Inland Revenue: 0845 300 3900 (Great Britain); 0845 603 2000 (Northern Ireland) British Gas Warm-a-life scheme offers benefit checks and energy saving tips free of charge to people living in privately owned or privately rented houses in receipt of income related benefits (not just British Gas customers): 0845 605 2535 Citizens Advice Bureau: Offers free, independent and confidential advice from more than 700 locations throughout the UK. Tel: 0207 833 2181.

For further media information, please contact Vicky Beynon at Golley Slater Public Relations on 0161 832 7178.

Notes to Editors

A typical couple who take out an IVA owe £48,000 to more than 10 creditors in unsecured loans and credit cards and have experienced financial stress for an average of 7 years. Their escape route is often bankruptcy or an IVA.

Individual Voluntary Arrangement (IVA)

In an IVA, an insolvency practitioner helps the couple to reach an agreement with their lenders to repay a proportion of their debts, usually in instalments over 5 years, and the lenders give up all claims beyond that. The IVA is a difficult process that has to balance the needs of the debtor and the creditors. It is important that the couple receive good advice during this process. Due to its formal nature, an Individual Voluntary Arrangement (IVA) has to be set up by a licensed professional.

Haines Watts IVA Limited

Founded in 1935, Haines Watts IVA Limited is the leading insolvency and accountancy company in the UK. Haines Watts IVA Limited (HW IVA Ltd) was set up by Gill Wrigley (Insolvency Practitioner) in 2003 to focus on providing an efficient Individual Voluntary Arrangement (IVA) service. Gill has extensive experience of IVAs having specialised in this area since 2001 following 10 years of corporate insolvency work.

Manchester Business School

Manchester Business School is the UK's largest campus-based business and management school. It provides a comprehensive range of undergraduate, postgraduate and custom-made executive programmes, for organisations from both the private and public sectors.

The research was conducted using secondary data such as MINTEL and DTI data. A quantitative analysis was performed on data for couples using Haines Watts's IVA Limited database as well as sources from the industry in general.