In the years leading up to the global financial crisis lenders were being very lax with regards to their criteria, and this meant that credit was granted to pretty much anyone that wanted it. However, over the last couple of years the global financial crisis coupled with the recession has resulted in more people maxing out their credit cards as they tried desperately to stay afloat financially.

A combination of these factors has resulted in some consumers having huge credit card debts, as well as loans and overdrafts, that they cannot afford to make repayments on, and this means that many may end up having to seek financial assistance with regards to their debt management. With lenders now said to be writing off record levels of credit card debt the problems facing many of these borrowers have become all too evident.

The number of people that are expected to become insolvent in the UK this year reflects an increase of 10 percent compared to the number of people that became insolvent last year.

One industry official said: “We stand on the brink of a personal insolvency crisis that will take years to work through the system. We know there are nearly a million people out there who are struggling with their debt. While it may be the case that these problems are resolved without help, there is a risk that they might snowball out of control.”