It is no surprise that borrowers are struggling to meet their home loan repayments. Five base rate increases in a year was always going to have a significant impact on homeowner's pockets. A borrower with a £200,000 tracker home loan pegged at the base rate will now be paying around £150 extra each month on mortgage payments. Even those who have taken shelter against rising interest rates by locking into a fixed-rate loan will not escape. Around 200,000 homeowners are expected to come to the end of two and three-year fixed rate deals in the next couple of months, and they will face a shock when they do. Even if they secure another fixed-rate deal, they will still have find extra money each week. Two years ago, borrowers could lock into a two year deal at 4.15 per cent, now they will have to pay around 5.8 per cent interest. If they fail to secure a new deal straight away, they will be hit even harder. Lenders will immediately start to charge their standard variable rates - which have risen as high as 8 per cent.

Yesterday's decision by the Bank of England to give borrowers a breather by holding rates at 5.75 per cent was a welcome relief, but let's hope they continue this hiatus on rate rises to allow everyone to come to terms with the recent interest rate hikes .

It may seem strange that while homeowners are struggling, fewer people have declared themselves insolvent. But there are good reasons why the number of people seeking an Individual Voluntary Agreement or IVA has fallen by 15 per cent while the number of people declaring themselves bankrupt has fallen by 3 per cent.

An IVA is a scheme which allows those who are in diffuculties with debt to cap their liabilities and pay off their creditors in manageable monthly sums. But creditors have been unhappy with these IVAs for a while now, complaining that debtors are not making a dent in their debts quickly enough. As a result, many of them have refused to allow borrowers to repay their debts in this way.

The IVA industry has been hard at work trying to come up with more satisfactory schemes, so once they do we are likely to see the number of IVAs rise. The 3 per cent fall in bankruptcy figures should also not be taken as an indication that all is well. Bankruptcy figures have been rising for years, and experts predicted they would plateau eventually. While the recent rate rises have added fuel to the fire, it is unlikely we will see the effects straight away, as those in debt can usually carry on for some time before they run out of credit options.