More people aged between 25 and 34 are turning to Debt Relief Orders (DROs) to deal with their debt problems than any other age group within the population, Insolvency Service figures show.
The figures, taken from a preliminary analysis of 44,000 DROs in England and Wales over the first two years since their introduction in April 2009, show that one in four people with DROs fall within the age group.
A DRO is a formal insolvency process that is aimed at people who have modest levels of debt and no realistic prospect of paying it off, and who have little surplus income and minimal assets.
DRO figures over the last two years show that one in three people under 25 who were given a DRO owed less than £5,000, whereas all other age groups typically owed more, with some 40% of over 25s owing between £10,000 and the maximum allowable debt in a DRO of £15,000.
Stephen Speed, Chief Executive of The Insolvency Service said: “Owing more money than you can afford to repay is a daunting prospect, especially when you’re young, but there are a number of options you can take and there is help available. I would encourage people struggling with debt to read our publication, In Debt? Dealing with your creditors, and to access free advice from debt charities at an early stage.
“If used correctly, a DRO can help people to address their debt problems and start again with a different attitude to credit and debt.”
Gillian Guy, Citizens Advice chief executive, said: “After Christmas, Citizens Advice Bureaux see more and more people coming to us in debt and having problems making ends meet to cover even essential household bills.
“While money problems don’t go away by themselves, the good news is that free help is available. Trained advisers can help you prioritise your debts, negotiate with creditors and provide advice on a range of debt remedies so you can find an option that is right for you. If you are worried about your finances, don’t delay, get help.”