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YOU ARE HERE: Home > News > 2005 > Record Numbers Seeking Help With Debts |
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Record Numbers Seeking Help With DebtsThe number of people seeking advice for debt problems is at all-time highs as Christmas spending is expected to exacerbate financial problems. All areas of the debt advice sector are reporting a surge in the number of people seeking help and advice with their debt repayment problems. On Tuesday 4th January, the first working day after the holidays, the Consumer Credit Counselling Service reported a record number of calls as it received 1,000 calls in a single day. In December it received over 12,000 calls, a 77% increase on the same period the year before. At the not-for-profit Debt Advice Bureau, the only national debt advice service staffed completely by unpaid volunteers, the number of people seeking advice has doubled. The organisation, which helps set-up free debt management plans, as well as Individual Voluntary Arrangements and Trust Deeds, for those unable to repay their debts, has been receiving enquiries in record numbers. The last three months of 2004 saw the number of formal and informal arrangements initiated up over 120% in each month, with December up 168% on the previous year. "In the first twelve days of January we have already initiated as many arrangements for clients as we did in the whole of January 2004", said Debt Advice Bureau director, Stephen Rose. There have been large year-on-year increases across the board. PayPlan, the debt management company, reported that calls throughout November, December and January were up around 50% on the previous year. Likewise, Citizens Advice Bureaux across the country have seen sharp increases in the numbers in debt-related enquiries. According to a spokeswoman, the organisation as a whole is currently receiving 1.1 million calls a year, but that is expected to rise. It is not just the number of people with debt problems that is rising, the level of debt has also increased. In July 2004, the level of total borrowing of British consumers surpassed the £1 trillion mark, with about 80% of that secured against homes and 20% unsecured in the form of loans, credit cards, store cards and catalogue credit. Figures form the Debt Advice Bureau show that whilst the average unsecured debt of people initiating arrangements with them in January 2004 was £27,738, so far this year it is £30,432, an increase of nearly 10%. "Many people could avoid a lot of the problems with creditors if they address their debt problems soon enough", says Mr. Rose. "Too often people contact us when things have deteriorated to th point that court action is being threatened". A recent study highlighted that those with debt problems wait more than a year before they begin dealing with them. It is important that if you are having problems that you seek help early, advise debt counsellors. Prepare a budget to see what you can afford, prioritise your debts and do not borrow more money in order to meet existing repayments or pay off existing debts.
Published Friday January 14th 2005 |
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