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Bell Pottinger North - Client News
Tuesday, May 23, 2006

June 2006, World Cup fever may be sweeping the country, but it also sees the 40th anniversary of Britain’s first credit card.  A leading insolvency practitioner asks at what cost to the nation?

Peter Sargent, head of Begbies Traynor, Halifax and fellow of R3 the Association of Business Recovery Professionals, suggests we have lost sight of the original use for credit cards, he explains:  “When Barclaycard launched in 1966, who would have thought they would have been indispensable 40 years on.  Unfortunately, for many people we just can’t say no to them and we currently owe £55bn as a result.”

“Our attitude to debt over the years has changed beyond recognition.  As a nation there are 67 million credit cards in issue.  For a population of 60 million it suggests we’ve lost the plot.”

According to DTI statistics, bankruptcy orders in 1966 stood at 3,862, at the end of last year the total of orders came in at 47,291.

Bobby Moore was earning the princely sum of £10 per week in 1966, by comparison, David Beckham earns over £100,000 per week from his football career.

House prices are another reason for large levels of debt, with the average house price nearing the £200,000 mark.  Mortgage payments have increased dramatically, first time buyers find it difficult to get on the property ladder, and it is little wonder people cannot re-pay their debts.

Plastic money undoubtedly has its benefits, it allows us to buy remotely over the phone or internet and gives us consumer protection.  However, we have now clocked up a staggering £1.8 trillion in unsecured debt rather than using cards to buy larger items outright and pay off the balance in full within the interest free period.

Peter continued: “I see so many people who simply cannot cope with their debts.  We’ve stopped living within our means, there’s a massive ‘I’m worth it culture’ perpetuated by the media mixed with ‘worry about it tomorrow’ and ‘live for the moment’ mentality.  The once shameful view of debt is now almost considered the norm.” 

“40 years ago you were bankrupt for life, now, first time bankrupts are discharged within 12 months.  IVA’s were brought in to help deal with the mounting debt crisis in 1987.  In their first year, there were 404 IVA’s, I would never have imagined there would be 20,293 in less than 20 years.  There’s an age old saying, you can only be sure of two things in life, death and taxes.  I disagree, you can be sure house prices, footballer’s salaries and insolvencies only go one way - unfortunately that’s up.”


For further information, please contact:
Joanne Fletcher-Wall
Bell Pottinger North

01625 506425

Information on Begbies Traynor can be accessed via the Group’s website at

www.begbies-traynor.com <http://www.begbies-traynor.com>

Notes to editors

About Begbies Traynor Group plc
The Group specialises in business insolvency management and is becoming increasingly active in the area of personal insolvency. It also offers services in corporate rescue and investigation services and has entered the field of corporate finance.

In November 2005, the Group entered the rapidly-expanding volume personal insolvency market via the acquisition of W3 Debt Solutions, a firm specialising in providing advice and practical support to individuals in debt. 

The Group has grown to its current network of 30 nationwide offices ranging from Scotland to the South West of England, with 350 operatives. The Company continues to pursue its strategy of organic development, coupled with the acquisition of specialist knowledge of both individuals and firms, to further increase its market share in its core services.

The Directors believe that the Group is the UK's largest independent insolvency, corporate rescue and recovery specialist with clients ranging from major institutions to individuals with business difficulties.

The Office Network
The Group operates with 60 licensed insolvency appointment takers, some 225 fee earning staff and 65 in support and administration. The Group operates from 30 locations across the UK.

Business Activities
The core business of the Group is the formal administration of insolvencies including receiverships, liquidations, administrations, company voluntary arrangements and business-related personal insolvencies. The Group has extended its activities into a range of consultancy services including corporate rescue, credit management, forensic and investigation services and corporate finance.


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