Latest figures suggest that the attempts of young women to live a celebrity lifestyle may be to blame for the rise in debt problems and subsequent bankruptcies in this age group.
The lifestyles reported on in glossy magazines (like Hello, Now and Heat) along with historic access to easy credit have proved irresistible to many young women. Of the 62,000 personal bankruptcies last year there were 1,560 women under the age of 24 compared with 1,250 men.
Increasing numbers of young women being made bankrupt blame credit card debt and mounting mortgage or rent payments, which their typically low monthly salaries are unable to sustain.
Worryingly, bankruptcies amongst the under-24 age group have risen 10% overall in the past five years, as young adults depend more on unsecured credit (personal loans, store cards and credit card debt) to fund an unrealistic celebrity lifestyle.
Debt advice organisations say they’re already receiving more enquiries from young adults who have risked bankruptcy because they’re trying to live like WAGs (Wives And Girlfriends) such as Wayne Rooney’s wife Colleen McLoughlin.
Ivan Cooper, Chairman at leading UK Debt Management company Chiltern, said: “Frequently we have seen that many young single women have an unhealthy proportion of their monthly salaries swallowed-up by store cards and credit card debt payments, which makes them extremely vulnerable if their situation changes.
“Over the last few years the pressure on young “status-conscious” women to follow their female celebrity heroines’ spending has grown immensely, but unless they have the same spending power such lavish shopping sprees could cause serious debt problems.
“Changes in interest rates or the loss of their job then makes them far more likely to go bankrupt, as their finances can’t service their commitments – which causes further debt problems.”
Debt help organisations suggest seeking impartial advice before any serious debt problems have chance to develop. Reputable debt advice companies, such as The Debt People, Hamilton Locke and Chiltern, can offer a number of ways to get out of debt.
Bankruptcy can often be avoided by seeking debt help from a reputable provider, as they are specialists in the subject and can suggest ways to repay outstanding balances but at a more affordable level.
These include offering free debt advice like help with budgeting and debt prioritisation methods, along with offering one of a number of professional debt solutions, like Debt Management Plans (DMPs), Individual Voluntary Arrangements (IVAs) and Trust Deeds, where necessary.
Informal debt management arrangements (like a Debt Management Plan or Debt Consolidation Loan) enable all outstanding balances on personal loans, store cards, credit cards, catalogues etc to be repaid with a single monthly payment.
With more formal debt management programmes, like a Trust Deed or an IVA, debts are repaid over a fixed period of time (usually three years for a Trust Deed and five years for an IVA), after which time all remaining outstanding balances are written-off.
For information on the debt solutions available, or for immediate impartial debt advice, please call the number at the top of this page.