Guidance on where people in the region with money problems should look for sound financial advice is being launched by the North East branch of insolvency trade body R3.
The new guide has been published by R3 in response to reports of increasing numbers of unregulated or unlicensed advisors targeting financially distressed individuals by claiming to be able to eliminate all financial worries and help people avoid their legal duties.
It covers a wide range of different topics, including what insolvency means in practical terms, what sort of advice and options are available for those potentially facing it, and how insolvency practitioners operate.
And with the North East having the highest rates of personal insolvency of any part of the UK, R3 regional chair Neil Harrold is advising local people to ensure they only seek advice from a qualified, regulated source if they start to think their debt problems are getting out of hand.
He says: “High personal insolvency levels are a stubbornly long-term issue for the North East, and when your financial problems are mounting, turning for help to people or companies who’re offering you a seemingly easy way out can clearly be tempting.
“However, if you follow this sort of advice from unlicensed advisers, there is a real risk that you may end up taking the wrong action about how to resolve your financial problems and can easily end up in a worse financial situation, or even breaking the law.”
According to the latest annual figures from The Insolvency Service, there were 22.6 individual insolvencies per 10,000 people in the North East in 2015, which are comprised of bankruptcies, Debt Relief Orders (DROs) and Individual Voluntary Arrangements (IVAs).
But despite this representing a fall of around 20 per cent on the regional rate in 2014, it is still five points higher than the national average (17.6) and almost double the rate for London (11.8).
Recent R3 research also found that indebted adults in the region owe on average £6,400, excluding mortgages and student loans, which is considerably higher than the national average of £5,700.
Twelve per cent of adults in the region who are in debt said they currently owed £10,000 or more, while seven per cent admitted to debts of over £20,000.
Forty-three per cent of those surveyed in the region said they were concerned about the amount of debt they were in, with 13 per cent saying they were very or extremely worried about their financial situation, and almost half (46%) of those surveyed said they sometimes or often struggle to make their money last until payday.
Neil Harrold, who is also a partner with Hay & Kilner Solicitors, continues: “Our free guide is designed to clearly show the different options people have when trying to face up to their money worries, what measures such as Debt Relief Orders and Individual Voluntary Arrangements actually entail, and how to identify the right qualified source for helping you to turn your finances around.
“The best course of action for anyone who feels their debts are becoming too great a problem is always to seek professional advice as early as possible, rather than hoping the issue will just go away, so you have the widest possible range of solutions for getting things back on track.”
The report ‘Unregulated Adviser Guidance for Individuals’ can be found on the www.r3.org.uk website via https://goo.gl/vXXVGW