The words debt and credit crunch are becoming more common these days; but just how widespread is the debt problem?
Pretty widespread by the sounds of it, especially when a leading debt advice charity says it is being overwhelmed by demands for help even in some of the richest parts of the country!
Transact, said demand for debt advice was rising across the country, but the increase was dramatic in middle-class areas. It said some advice centres were so busy they had been turning people away.
At the Mid-Sussex Debt Advice Centre, which serves the Haywards Heath area, the average debt of clients (excluding mortgages) is £20,000, rising to £110,000 in the most extreme cases.
Emma Russell, a debt adviser, said: "I've had at least two clients tell me that they would have killed themselves if they hadn't found out that we were here."
Transact says government funding has been generous, with an extra £55 million over the past three years to fund an extra 500 debt advisers. But it says this has been concentrated on inner-city areas where the rise in problem debt has been less severe.
Jamie Elliott, of Transact, said:
"In the past it was almost uniquely people on benefits, people in social housing, who went to debt advice agencies. Since the credit crunch started they are seeing a big increase in professional people and homeowners coming to seek help, who have just been pushed over the edge and now can't cope with their outgoings."
"These services now with the credit crunch are being overwhelmed by a whole new breed of debtor: middle-class people. But what that means is there is much less debt advice to go round."
Many of you seeking help from
debt advisers have already used the credit in your homes to pay for home improvements but, as your
fixed-rate mortgage came to an end and the cost of living having gone up, many of you have been finding it hard to meet your repayments, even if you earn a relatively good salary.
Transact said that it expects the problem to become worse, and has called for more funding to provide debt advice.
Debt advisers say banks and building societies must take some responsibility for encouraging debt and the government should do more to educate people about financial responsibility. But they also say a large part of the blame also rests with those of you who have borrowed so much.
If you are struggling with your finances then do not panic. You can seek advice and support from these organisations:
Consumer Credit Counselling Service
National Debtline
Citizen's Advice Bureau
Samaritans
You should also speak free of charge to a debt adviser who can provide you with advice and solutions to help you resolve your debt and credit problems.
Are you struggling with debt? Have you been pushed financially to the edge?
What will you do about it? Why not let us know in the comments?
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