The number of people being made forced into bankruptcy is 10% higher than the national average as more and more people are driven into debt – and into the arms of pay day loan companies and loan sharks.
There has been a dramatic increase in the number of people struggling to pay their debts during the course of the past two decades, and Alex Cunningham has warned that this is driving an explosion in personal insolvency.
The number of new insolvencies has trebled in the past ten years, with more than 100,000 people entering formal insolvency procedures in the twelve months to September 2013 alone and potentially thousands more being unaccounted for.
The rate of personal insolvency in Stockton North, at 27.1 per 10,000 adults. Alarmingly, the number of new cases within the constituency has not been below the national average since 2008.
The North East’s economy has changed significantly during the course of the past two decades, though the decline of traditional manufacturing and other heavy industries has left a lasting legacy across the region in terms of high unemployment and higher than average personal insolvency rates.
“I was stunned to discover the extent to which personal insolvency has grown in recent times. While there is naturally variation between constituencies, it is clear that the North East is particularly heavily affected and there is a concentrated pocket of high insolvency rates across constituencies in the Durham Tees Valley.
“However, with the Government monitoring new bankruptcies, Debt Relief Orders, and Individual Voluntary Arrangements, but not recording new Debt Management Plans, I fear that the number of people experiencing financial hardship is far higher than the statistics suggest, with many stuck in debt for years at a time and making repayments that barely have any impact on what they owe.
“With the North East having a higher proportion of people employed in the public sector than many other areas, the entire region has already felt the sharp consequences of blunt cutbacks initiated by this Tory-led Government. And to top it off, as part of these cutbacks, Stockton’s Insolvency Service office was last year merged with services in Newcastle, making it increasingly difficult for vulnerable people needing advice about bankruptcy to get the support they need.”