The bankruptcy of actress and singer Martine McCutcheon shows that debt problems are now common among people on all incomes, according to the insolvency trade body R3.
However the organisation is warning that, unlike the former EastEnders star, many people in the North West cannot afford to go bankrupt because they cannot pay the £700 upfront fee for court and administration costs.
Jeremy Oddie, who is North West chair of R3 and also head of recoveries at accountants Mitchell Charlesworth, said that nationally bankruptcies fell by 24 per cent last year and the organisation suspected that the charges, which must be paid before debtors can petition for bankruptcy, was one factor.
R3 is calling on the government to allow the allow the fee to be paid by instalments or to allow greater use of Debt Relief Orders, which are designed to help those with small amounts of debt and which carry a fee of just £90.
Jeremy said: “Debt is still a major problem for people in the North West. R3’s research has revealed that two out of three people in the region are worried about their debts, one in ten is paying off the interest only on their credit card and one in 20 is in a debt management plan.
“The fall in the number of bankruptcies is at odds with these figures. We know that in some cases, it is because lenders are allowing people to pay off their debts over a longer period, but in other cases it is because people cannot afford to go bankrupt and instead are turning to measures such as unregulated debt management plans. The up-front fee is denying access to debt relief to the very people who need it most.”
Martine, who played Tiffany Mitchell in the soap, had a number one chart hit with her single Perfect Moment and won a Laurence Olivier Award in 2002 for her stage portrayal of Eliza Doolittle in My Fair Lady. She is the latest in a line of celebrities to become bankrupt which also include Warrington singer Kerry Katona.