Loss of income top reason for getting debt help
Published: 10 June 2009 By MoneyhighStreet Staff Leave a Comment
Loss of income was the top reason that clients went to EuroDebt Financial Services for debt help between December 2008 and January and May 2009.
Previously the top reason was for multiple debts getting out of control and people getting into debt because they could not keep up repayments.
With the recession biting, loss of income or redundancy is an increasing cause of debt problems.
According to the Keep Britain Working campaign, over half of UK workers have had a pay cut, a reduction in working hours or some loss of benefits since the recession began.
Kevin Still, Director at EuroDebt, said ‘Many families and individuals have tried to manage a very fine balancing act paying off debts over the last few years. But the combination of the reduced access to credit, higher credit card interest rates and then a cut to overtime or second income or, worse still, job loss, has meant that the level of debt becomes too much to cope with.’
Being caught in a debt spiral is now the second reason for seeking debt help.
As Still says this shows ‘the impact of enormously restricted lending practices over the last year or so. Revolving credit was certainly the fallback for many families and individuals over the last few years.’
Easy access to credit is no longer a viable option as lenders have tightened their lending criteria.
Debt is a problem that won’t go away by itself. Action needs to be taken at the earliest opportunity to prevent debts getting out of control and leading to further serious consequences.
Eurodebt is a debt management company who work with their clients to help them take action on their debts, with a debt management plan if appropriate, or other debt solutions as required.