Record Numbers Seeking Debt Advice
The number of people seeking advice from the Citizens Advice Bureau about how to manage their debts has risen by 33% in the past year.
The charity said, since October 2007, it had been contacted by more than 77,000 new callers in England and Wales with mortgage and loan arrears.
The number had increased sharply in the past few months due to the worsening credit crunch.
The charity said vulnerable households were those most affected.
‘Basic essentials’
The Citizens Advice Bureau (CAB) reported that people mainly fell into arrears after losing their job, becoming ill or separating from a partner.
More than half of those calling the charity’s volunteers about mortgage and debt problems were aged between 35 and 49, while one in five were single parents.
Mr Harker 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.”
‘Fair treatment’
Mr Harker said mortgage lenders and fuel companies should do everything in their power to ensure the situation did not get any worse for those already in debt.
He recommended workable solutions when it came to repayment arrangements rather than extra charges.
However lenders, on average, started repossession action when people were four months into their arrears.
Mr Harker said: “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.”
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The governement needs to implement some kind of policy or agreement with lenders to help those in debt (most people), rather than encouraging debt companies.