Debt Consolidation – The Wealthy at Risk

Debt consolidation is something City workers may be facing up to as the credit crunch takes its toll. Even with offshore banking and investments, the rich are being hit by the financial crisis

Debt consolidation isn’t just something those on the financial breadline have to consider, as the credit crunch kicks in, predictions of job losses are being bandied around. Already, it’s expected City workers’ bonuses will disappear, and although for most of us earning an average salary, this seems like no big deal, for some it could end up leaving them with unmanageable debt. Debt consolidation, IVAs and bankruptcy are all set to increase for those high earners at the top end of the salary spectrum.

Debt Consolidation for the Super-rich

Debt consolidation is a reality for the super-rich as some City workers’ lifestyles are dependant on their big bonuses. Some City workers have mortgaged themselves to the max to afford London property in exclusive areas, and if prices plummet into negative equity and their salaries are affected, debt can quickly escalate. But those who hold on to their jobs could be the lucky ones; with debt consolidation schemes, by downsizing, or adjusting their outgoings to match their reduced income, it’s possible to batten down the hatches and survive the credit crunch. But for some, debt consolidation may not be enough; bankruptcy and house repossession could be looming.

40,000 City Jobs at Risk

A report in the Evening Standard states that up to 40,000 City jobs could be axed as the financial crisis deepens. One in ten jobs could be chopped in London’s financial heart; which will have a knock-on effect on property prices, deepening the financial crisis. Debt consolidation is likely to be on the cards as more City workers face up to the financial reality. Bankers, traders and financial support staff are all at risk of job cuts and redundancy – the loss of high salaries with the burden of expensive mortgages, cars and lifestyles will lead to spiralling debt for some; debt consolidation strategies will be crucial if they want to stay afloat.

‘Debt Consolidation’ – The New Buzz Word

The estimate of 40,000 jobs being at risk was projected by JP Morgan, a leading US investment bank. The figure is much higher than the 19,200 the Centre for Economics and Business Research recently suggested for City job losses. Debt consolidation is going to be more of a buzz word in the City than big million-pound bonuses for the next few years.