Do The Number Of CCJs Issued Increase After An Interest Rate Increase?

It would make logical sense that those people who are in financial trouble would be worst affected by any increase in the interest rates. It would also make sense that those people who have financial trouble would be the most likely people to have a CCJ taken against them. Therefore it would make logical sense that after an interest rates increase; an increased number of CCJs would be obtained. For those people who have found themselves in financial problems a CCJ can just seem like the icing on the cake of their financial storm.

The interest rates may be small when taken individually, but when taken together the increases amount to a significant amount. For those people who borrowed money when the rates were significantly lower there is a good chance that they will find themselves in some sort of financial problem. This can escalate as the interest rates increase and lead to a stage where the person can find that they are unable to pay all the bills that are piling up. This then leads to the advent of a CCJ.

If the interest rates increases had not occurred or had been slowed then the person would have theoretically been able to repay the debt. Many people who take out loans or mortgages work out their repayments with consideration only for the current interest rate. They may not necessarily ignore the prospect of interest rate increases, but unless one is imminent people tend to minimised the effect on their debts. This leads many people to borrow more money than they comfortably repay and after one or more interest rates increases they find that they cannot meet all their financial obligations.

This in turn leads to the choice of what to do to relieve the burden. This often leads people to neglect a bill for a non-essential service in order to pay off their debts and this leads to them receiving a CCJ. This can be seen as destroying any chance they might have had for any further financial assistance. Even if they were permitted to take a loan or mortgage from a traditional bank or lender, the rates that they would be charged could be likely to make it impossible to repay the loan. This can lead to an increase in their financial troubles, which can lead to more CCJs. This logic leads one to believe that an increase in interest rates leads to an increase in the number of CCJs handed down.