IVA

A recent study from Moody’s Investors Service has shown that more people are now better positioned financially to pay off their credit card debt. According to the ratings agency, defaults on credit cards went down in May. Of all accounts, 10.71 percent were charged off, which marked a .20 percentage point decline from April.

“The two-month decline is a clear break from the rise in charge-off rates experienced during the first quarter of the 2010,” Moody’s said in a release.

Delinquencies, which can often act as a future indicator of defaults, also showed a decline Moody’s said that the number of accounts with late payments fell to 5.26 percent, the lowest level seen since November 2008.

Though the figures spell good news, there are still many consumers dealing with the after effects of recession—unemployment, redundancy, lower pay cheques— and are unable to pay off their debts. The number of people who declared bankruptcy in the first quarter of 2010 is a record high and a grim reminder that at the ground level situation has far from improved. Infact, going by the forecasts, the numbers are likely to rise further in the coming quarters also.

Despite the fact that the economy is rising from recession it will still take time before the situation returns to normal. So for those facing difficulty in paying their loans, it is advisable they seek debt advice at the earliest to seek options other than bankruptcy to deal with debt.

Most debt management companies in the UK offer debt advice for free and so you can talk to the counsellors without worrying about additional costs. Realize that there are debt management plans that can help you reduce the amount of debt so that you are able to make affordable monthly payments to your creditors. If you are stressed because you are unable to pay your debt, seek debt advice to understand how to get back on financial track without taking additional loans.