11 September 2007
The number of people approaching the Citizens Advice Bureau (CAB) to seek advice about their debt problems has hit record levels - highlighting the need for both lenders and consumers to take responsible action.
According to the charity, debt enquiries to CAB offices in England and Wales have increased by 20% in the last year, totalling 1.7 million in 2006/2007.
Credit card debt and problems with unsecured loans accounted for 40% of the CAB enquiries, while one in four of all debt enquiries concerned credit and store cards.
Meanwhile, problems with overdrafts and unsecured personal loans increased by more than 18%.
Rising utility bills, council tax expense and keeping up with mortgage repayments have all been cited as reasons behind the number of people seeking help with their debt problems.
Citizens Advice Chief Executive David Harker explained that it is both the lenders' and borrowers' responsibility to ensure that any money lent will eventually be repaid.
"We still see widespread evidence of people being lent much more money than they can afford to pay back, with many companies actively marketing expensive credit and loans to people who are already struggling," he said.
"Lenders need to do much more to check that borrowers are really in a position to keep up repayments when they take out credit.
"We also want to see creditors being more willing to negotiate with people in debt, and to work with us in helping people manage their debt problems effectively.
"People also need help to build their understanding, skills and confidence in dealing with money matters and particularly in using credit sensibly," he added.
CAB advisors currently deal with over 6,600 debt problems per day.