Financial crisis prompts more people to take debt advice
The effects of the global financial crisis are being reflected in the rising number of people seeking advice about their debts, according to officials from the Citizens Advice Bureau. The CAB claims that over the past year the level of enquiries relating to debt problems has soared by one third, and over the past few months alone, with finances getting increasingly tight for many households, there has been a sharp spike in the number of debt related enquiries.
Over 77,000 new enquiries are said to have been made since October of last year in England and Wales, and these were off people with mortgage and debt arrears. Officials from the CAB said that those most affected were more vulnerable households. In many cases people had fallen into arrears after losing their job, losing their partner, or becoming ill. Over half of those calling the charity were aged between 35 and 49, and one fifth of callers were single parents.
An official from the charity said: “While we are pleased to see the number of consumer credit problems going down, the increase in the number of inquiries about basic essentials is worrying. These figures show how the current economic situation is hitting vulnerable and low-income households the hardest.”
He urged those experiencing problems to ensure that they contacted their lenders to try and come to an agreeable solution, stating: “All creditors should treat borrowers in arrears fairly and sympathetically, negotiate with borrowers in trouble and only use court action for mortgage arrears as a last resort.”
He also said that lenders needed to make sure that, in the current climate, with even banks having to be bailed out, they did all that they could to help struggling consumers.
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