Repayment pressures exposed by new figures from debt experts

26/02/2009

People turning to Citizens Advice Bureaux (CABs) for debt help owe over £16,000 each, shock new figures show.

This total has risen by two-thirds since 2001 - and comes to around 18 times average monthly salaries.

CAB described the study as "sobering" and said that the average debt would take 93 years to pay off at an affordable rate.

However, the debt total is outstripped by internal data from EuroDebt, which shows that the average level of card and loans debt for its clients is over £24,000.

Homeowner clients with mortgage costs are also typically facing £35,000.

Commenting, EuroDebt director Kevin Still said: "The data on the level of debt facing our clients is markedly different from the CAB Report and we believe this can be attributed to two key factors.

"Firstly the charity debt organisations, such as the CABs, are facing an overwhelming demand for help and often the clients who most urgently need help - usually with the higher levels of debt - don't believe they can wait for assistance from the voluntary sector. Hence they come to organisations like EuroDebt which can offer them an immediate support, dealing with creditors already chasing for outstanding payments, often freezing interest and charges."

Mr Still added: "The other reason I believe the profile of clients of debt management companies like EuroDebt is so different to those of the CAB is because the voluntary organisations focus on a self-help approach to debt management. This keeps the onus with the individual on managing the relationships with their creditors and, unfortunately, often means that they are less successful in getting interest frozen on outstanding debts or stopping charges."

Tags; Budgeting Advice, Credit Card Lifestyle,

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