The Telegraph reports today that almost a million households will face court action over their debts this year.
The number of county court judgements served against people for debt issues is close to reaching a ten year high this year, according to figures from the Registry Trust.
More than 247,000 judgements have been served against people for non-payment of debts so far this year, 9.5% more than in 2006, and the highest quarterly total since 1997.
The massive amount of consumer borrowing which has taken place over the past five years is partly to blame, with household debt in the UK now more than £1 trillion.
According to credit rating agency, Experian, the average owed on a county court judgement last year was around £2,500.
According to the chairman of the Registry Trust, Malcolm Hurlston:
“This quarter’s record numbers [of judgements] give a warning to unsecured borrowers that their credit ratings are at risk and further proceedings are only a step away.”
County court judgements are sought by creditors, and if a debtor does not pay up within a month, the details remain on their file for six years. If the debt is not paid at this point, the creditor can take further steps to recover the debt.
This can include appoint bailiffs, or in the case of debts secured against property, a court order for repossession.
The figures suggest that many people are struggling to manage their finances some may have taken on large mortgages, and others have borrowed on credit cards to finance their living expenses.
This means that more and more people are under threat of repossession, if they cannot afford to keep up mortgage payments, or have secured large loans against their homes.
If you are in trouble with debt, and have been unable to make or keep up with payment arrangements, it may be better to sell your house quickly to pay off your debts rather than wait until your house is repossessed and sold off cheaply at auction.
A quick house sale can avoid the need for repossession, and may enable you to cover your debts, as well as leaving you with a lump sum to buy or rent another property.