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High debt and bankruptcy levels `lead to use of bridging finance`

05/04/2007

High levels of bankruptcy and debt have resulted in more consumers using bridging financing, it has emerged.

Paul Rumbold, marketing and sales director at Affirmative Finance, told Credit Card Journal that short-term bridging loans can be useful for people who are looking clear debt.

He said: "Bridging finance can be used to either head off bankruptcy proceedings or to clear the outstanding debt and annul the bankruptcy or [individual voluntary arrangement] IVA."

More than 100,000 people declared bankruptcy in the UK in 2006, according to the publication, and many others are choosing IVAs.

Commenting on the trend, Mr Rumbold remarked: "We are finding an increased demand for options in this area and certainly IVAs are working well in this current climate."

Bridging loans can help people get out of debt via a total refinancing or a second charge behind the existing mortgage lender, he added.

Such loans are often used by people who are looking to buy commercial property but have not yet sold their old investment.

Many debts unaffected by base rate cut 09/01/2009 - Yesterday, many borrowers welcomed the Bank of England’s base rate 1.5% base rate – an historic low 08/01/2009 - Today’s base rate cut by the Bank of England’s Monetary Gas price cuts expected 07/01/2009 - Energy company Scottish Power has announced the launch of a Personal debt about £1.5 trillion 07/01/2009 - The UK’s personal debt stands at around £1.5 trillion, according