Tuesday 24th of November 2009
Bankruptcy could play a part in pushing up the number of private homes which remain empty, although an individual voluntary arrangement (IVA) can be a less severe route to take in order to make headway into paying off debts.
A new study by Halifax reveals that the number of private properties which have been empty for more than six months exceeded 300,000 in 2008, which represents the first time this has happened in five years.
The Halifax Empty Homes report notes that the north-west has the highest number of long-term empty homes - accounting for 22 per cent of the total seen in England.
Losing a home could be the biggest fear of Britons who are in debt because of climbing interest rates on their unsecured borrowings, especially if they have a family.
Being declared bankrupt can result in a family home being repossessed and sold, a problem which could push up the empty home figures. An IVA can prevent a family losing their home and can be used by some individuals with debts of over £15,000.
A further 60 per cent of local authorities with the highest proportion of long-term empty private homes face an unemployment rate which is above the national average.
Britons who want to move to a more affordable repayment plan such as an IVA in order to make their household more financially secure could find that avoiding bankruptcy allows them to have greater monetary freedom, such as access to a current account.
"In many cases, high levels of long-term empty homes reflect relatively high levels of deprivation, low average earnings and high unemployment," asserts Suren Thiru, economist at Halifax.
Commenting on government plans for Britons to apply online or through the post to become bankrupt, the Consumer Credit Counselling Service warned of the long-term impact this could have on a person’s life, such as job restrictions - something which can be avoided with an IVA.
By Chris King
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