Younger earners leaning on debt relief

LONDON, Dec. 31 (UPI) -- An insolvency program in Britain that caters to those with low incomes is proving most attractive to wage earners ages 25-34 years, records show.

The Debt Relief Orders process, dubbed "bankruptcy light," which began in April 2009, has had 44,000 applicants, more than a quarter of whom are under 34 years old, The Independent reported Saturday.

The process was designed to offer protection from creditors for those with debts of less than $23,300 and who own assets worth no more than $475. To qualify for the program, a participant's monthly disposable income needs to be under $77 per month.

Debt services, however, are advising people with high debts to seek court protection rather than fall victim to loan sharks or what is termed payday lenders, who offer quick loans that fall due when the borrower's next paycheck arrives.

"At the same age their parents would most likely have bought their first home, have a comfortable pension lined up and be saving for the future. For today's 25- to 34-year-olds the picture is much bleaker," said Joanna Elson, chief executive officer of Money Advice Trust.

"Traditionally when young people have borrowed money it has been with the expectation of a continual rise in earnings over coming years. Young people today may have borrowed with the same expectations, but the difference is that those expectations have not been realized, leaving many struggling to meet agreed repayment plans."