'Poor decision-making' leads to debts
August 24, 2007
Making the wrong choices when borrowing money to pay off debts can lead to a deeper financial problem, says one independent financial advisor.
While the total sum of personal debt through in the UK stands at £1,345 billion, according to Credit Action, Debt Free Direct claims a lot of it could be avoided if people took time to make the right decisions.
Another factor in Britain’s spiralling debt is the lack of "responsibility" displayed by some lenders, who delve out money to customers without assessing individual financial situations accordingly, the firm says.
Derek Oakley, insolvency director at Debt Free Direct, said the government’s new initiative to promote financial education will only solve part of the country’s debt problems, caused by credit cards, loans and overdrafts.
"Financial education has long been identified and the political parties are picking up on this now as a factor that whilst many people get into debt just by poor decisioning," he explained.
"Unquestionably, if you have too much debt then borrowing more is not really likely to be the answer," Mr Oakley concluded.
Written by Peter Kenny · Filed Under News Banking
R3 - The Association of Business Recovery Professionals is working with the IFS School of Finance to send some of our Insolvency Practitioners in to schools, with specially designed classroom exercises tailored to educate children about the pitfalls of debt.
R3, the Association of Business Recovery Professionals, is the UK’s leading trade association for insolvency, business recovery and turnaround specialist. It promotes best practice for professionals working with financially troubled individuals and businesses and provides a forum for debate on key issues facing the profession. R3 represents 97% of licensed Insolvency Practitioners in the UK.