Expert debt views & facts

Recent research has found one in four people expect to have nothing to leave to their families after they die and two-thirds of people will ensure they have enough funds for themselves before thinking about leaving an inheritance.

The survey, carried out by personal finance site Fool.co.uk, also found nearly half of British people expect to receive some kind of inheritance and 11 per cent say it is "vital" to their personal finance plans.

These combined figures may increase numbers of people facing debt problems in the future. However, making preparations may limit the effects of unpleasant surprises.

David Kuo, head of personal finance at Fool.co.uk, said: "We can no longer rely on assets being passed down the family tree. And for the many of us who are struggling to make ends meet, we will have to fend for ourselves in the here and now."

Fending for ourselves may include confronting our debt problems professionally. Numbers of Individual Voluntary Arrangements (IVAs) increased by 32 per cent in the first five months of 2008 according to TDX, perhaps indicating more people are taking advantage of such schemes that lower the amount owed by lenders and allow affordable repayments.

However, despite the London Daily News reporting a four-fold increase in bankruptcies in the capital, the total number of those declaring bankruptcy in England and Wales fell by 15 per cent in the past year, the Ministry of Justice has stated.

This may be considered good news as, according to Gregory Pennington, "bankruptcy is the most severe consequence of debt and should never be entered into lightly". It may be the most appropriate way to start a clean financial slate, however.

Seeking advice has been recommended by a number of experts recently, including Debt Advisors Direct, indicating the importance of facing debt problems. The organisation particularly warns against taking out consolidation loans without professional advice.

Last month the Financial Services Authority launched a new website offering financial advice for young people – Whataboutmoney.info – while mortgage advice is a growing industry, with the Certificate in Mortgage Advice and Practice still attracting applications despite a decrease in mortgage agreements.

Those in debt are also advised to look at their credit card purchases. Using your card unwisely may amount to thousands of pounds of unnecessary debt, Moneyfacts has warned.

In June, Shelter also revealed around four million people in the UK were paying off their mortgage repayments with their credit card, ultimately finding themselves in more debt.

During the current credit crunch, British consumers are being urged to keep an eye on the way they spend as much as what they buy.