Another year older... don't fall deeper in debt!
19/12/2007
The start of the new year is likely to see more people than ever struggling to pay off debts, and debt charities are bracing themselves for a flood of calls after Christmas from overstretched borrowers.
January has always been the busiest time of the year for groups such as National Debtline and the Consumer Credit Counselling Service (CCCS), but this year is expected to be worse than ever due to increases in household finances from higher mortgage repayments and spiraling fuel and utility bills - whilst earnings have been falling in real terms.
In January 2007 calls to National Debtline soared from 10,546 in December 2006 to 26,532, and the Consumer Credit Counselling Service received 53% more calls for help during the same month.
Paul Mullins, chief executive of National Debtline, said: "Christmas often tips many households into unmanageable debt, and this year is expected to be particularly bad. At the same time people may also find they are unable to get further credit as a result of the global credit crunch, meaning they can no longer rotate their debt.
"In addition, this has not been an easy year for the economy. Many households will have felt the effect of the five interest rate rises this year and many will have experienced an increase in their monthly mortgage and loan repayments. For those who were intending to pay for Christmas using cheap, affordable credit, they may now find such deals are hard to find as lenders have tightened their lending policies due to the credit crunch."
The Citizens Advice Bureau also said that a record number of people had contacted them for help with unmanageable debt during the year to March 2007, with the group handling 1.7 million cases - a 20% jump on the previous year. In fact debt is now the most common problem they deal with, accounting for one in three of all enquiries.
If you have debt problems in January 2008, do remember that there is plenty of free advice available - and do NOT be taken in by unscrupulous debt companies advertising to "solve" your problem. Their so-called "services" will almost certainly only make matters worse.
In the first instance contact the CAB's debt helpline service on free phone 0800 988 7559, or visit the site linked below.