'Buy-now, must-have culture' blamed for increase in young women going bankrupt

Young women have overtaken men as the predominant sex falling into bankruptcy. New research from accountancy firm Wilkins Kennedy reveals that 55 per cent of bankrupts under the age of 24 were women last year. Five years ago, that figure was 48.3 per cent and Keith Stevens, a partner at Wilkins Kennedy, blames social pressures to spend for the reversal.

"Young women are very much into the buy-now, must-have culture and they're willing to buy on credit," he says. Writing off debts as a bankrupt has become too easy an option, he adds, but what are the alternatives for young people wanting to tackle their debts?

Firstly, anyone struggling with debt should contact their creditors. Some lenders will accept offers of smaller payments if debtors contact them and explain their situation. Debtors can also get free financial advice from various charities such as the Consumer Credit Counselling Service (CCCS), National Debtline and the Citizens Advice Bureau. These organisations will help debtors to set up a debt management plan and can negotiate with creditors on their behalf, much as a debt management company would do, but without the fee.

One way of avoiding bankruptcy is an individual voluntary arrangement (IVA) made between the debtor and the creditors. It will usually take the form of regular payments over a fixed period of time, typically five years. If 75 per cent of the creditors accept the proposal, a licensed insolvency practitioner is required to prepare a financial report for the creditors and court proceedings. They will also make an application to court for an interim order to stop creditors from petitioning for bankruptcy. However, IVAs are complicated and expensive. Large commissions are taken out of payments and reduce the amount going towards debt. They also have an adverse affect on credit ratings and have a reputation for being sold to unsuitable clients; the CCCS recommends IVAs in just 3 per cent of cases.

Debt relief orders (DRO) are a new, low-cost insolvency alternative introduced in April for people with relatively low levels of debt. Individuals with no more than £15,000 of debt (excluding student loans and secured loans) are eligible to apply for a DRO. Additionally, applicants can have no more than £50 a month surplus income, no more than £300 in assets and they cannot own their own homes. A non-refundable court fee of £90 must be paid before the application will be considered, but once a DRO is in place, accounts are frozen, usually for 12 months. "These have an advantage over bankruptcy because they are much cheaper and could be a better option for younger people who are unlikely to have assets," says Frances Walker from the CCCS.

Anyone who find they owe more than 20 per cent of their take-home pay in unsecured debts should start to make cut-backs. Keeping a spending diary and budgeting carefully will also help. Taking advantage of 0 per cent credit cards will provide some breathing space from interest payments. "It's about maximising your income and making sure you're getting all the benefits you're entitled to," says Ms Walker.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

One father who couldn't get One Direction tickets for his daughters phoned in a fake bomb threat and served eight months in a federal prison
people... (and one very unlucky giraffe)
Arts and Entertainment
Joel Edgerton, John Turturro and Christian Bale in Exodus: Gods and Kings
Arts and Entertainment
Brendan O'Carroll as Agnes Brown in the 2014 Mrs Brown's Boys Christmas special
tvCould Mrs Brown's Boys have taken lead for second year?
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
Alexis Sanchez missed a penalty before scoring the opening goal with a header at the back post
footballLive! Sanchez makes up for penalty miss to put Arsenal ahead
Arts and Entertainment
Amy Adams and Christoph Waltz in Tim Burton's Big Eyes
film reviewThis is Tim Burton’s most intimate and subtle film for a decade
Arts and Entertainment
Jack O'Connell stars as Louis Zamperini in Angelina Jolie's Unbroken
film review... even if Jack O'Connell is excellent
Arts and Entertainment
Madonna is not in Twitter's good books after describing her album leak as 'artistic rape and terrorism'
music14 more 'Rebel Heart' tracks leaked including Pharrell Williams collaboration
Rooney celebrates with striker-partner Radamel Falcao after the pair combine to put United ahead
footballManchester United vs Newcastle match report
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Selby Jennings: SVP Model Validation

    Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

    Selby Jennings: Oil Operations

    Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

    The Jenrick Group: Night Shift Operations Manager

    £43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

    SThree: Trainee Recruitment Consultant - LONDON

    £20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

    Day In a Page

    A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

    Christmas without hope

    Gaza fears grow that conflict with Israel will soon reignite
    After 150 years, you can finally visit the grisliest museum in the country

    The 'Black Museum'

    After 150 years, you can finally visit Britain's grisliest museum
    No ho-ho-hos with Nick Frost's badass Santa

    No ho-ho-hos with Nick Frost's badass Santa

    Doctor Who Christmas Special TV review
    Chilly Christmas: Swimmers take festive dip for charity

    Chilly Christmas

    Swimmers dive into freezing British waters for charity
    Veterans' hostel 'overwhelmed by kindness' for festive dinner

    Homeless Veterans appeal

    In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
    Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

    'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

    Yazidi girls killing themselves to escape rape and imprisonment
    Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

    Ed Balls interview

    'If I think about the deficit when I'm playing the piano, it all goes wrong'
    He's behind you, dude!

    US stars in UK panto

    From David Hasselhoff to Jerry Hall
    Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

    Grace Dent's Christmas Quiz

    What are you – a festive curmudgeon or top of the tree?
    Nasa planning to build cloud cities in airships above Venus

    Nasa planning to build cloud cities in airships above Venus

    Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
    Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

    Clocks, rifles, swords, frogmen’s uniforms

    Surrounded by high-rise flats is a little house filled with Lebanon’s history
    Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

    Four months after the bombardment, Gaza’s wounds are yet to heal

    Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
    Gastric surgery: Is it really the answer to the UK's obesity epidemic?

    Is gastric surgery really the answer to the UK's obesity epidemic?

    Critics argue that it’s crazy to operate on healthy people just to stop them eating
    Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

    Homeless Veterans appeal: Christmas charity auction

    Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
    Pantomime rings the changes to welcome autistic theatre-goers

    Autism-friendly theatre

    Pantomime leads the pack in quest to welcome all