Debt advisors 'in increasing demand'

15/05/2009

A continuing rise in the number of people seeking help with their problem debts has been predicted.

The Consumer Credit Counselling Service (CCCS) said today that the recession was forcing more and more people to take action on their personal finances.

UK economic output is shrinking at the fastest rate for 30 years according to latest government figures.

Unemployment has also risen above seven per cent to 2.2 million - limiting the ability of many to pay their debts.

Joseph Surtees, policy and research officer at the CCCS, said: "Towards the end of last year there was a large increase in the number of clients ringing our helpline and that has continued rising at the beginning of this year, we are certainly the busiest we've ever been."

Kevin Still, EuroDebt director, said: “We have seen a significant rise in the last 12 to 18 months in the number of financial advisors referring client cases to EuroDebt where IFAs or brokers are reluctant to provide debt advice. The number of homeowners entering one form of debt solution or another following a face-to-face meeting with a debt advisor has more than doubled in the same period. Average debt levels are higher and over 20 per cent of clients already have arrears on their mortgage or secured borrowings."

He added: "Taking professional advice is the first step in effectively looking at the right strategy to deal with personal debt whether in the short-term or in the long-term. Many faced with unemployment are likely to have insufficient reserves or savings to cope with more than a couple of months of substantially reduced household income.”

Figures released earlier this year by charity Credit Action showed that the UK has a total personal debt approaching £1.5 trillion.

Households who owe money on some type of unsecured debt - such as a personal loan or a credit card - were found to owe over £20,000 each on average.

Tags; Housing Debt and Bills, Credit Card Lifestyle,

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