Charity sees surge in debt cases
The number of people seeking help over debt from charity Citizens Advice Bureau (CAB) jumped 21 per cent for the first three months of the year.
The figures from CAB showed enquiries about redundancy soared 179 per cent in the first three months compared to last year, as job loss contributed to the rise in debt problems.
Citizens Advice chief executive, David Harker, said: "These new figures show the human impact of the recession as more people are coming to the Citizens Advice service for help.
"In particular we are seeing an enormous rise in the number of people turning to us for help because they have lost their job, or are struggling with debts or having problems keeping up with their mortgages.
"It is therefore absolutely vital that all lenders and creditors treat people in arrears fairly and sympathetically, negotiate with borrowers in trouble and do everything they can to help ease their debt problems and avoid adding to them."
The most common reasons for debt were low income, over-commitment, illness or disability and job loss, the charity said, but Citizens Advice also blamed irresponsible lending for the rise in indebtedness.
An average CAB debt client owes around £16,971, an amount it would take an average of 93 years to pay off at a rate they can afford, the charity said.
Alan Tomlinson, partner at licensed insolvency practitioners, Tomlinsons, said the figures are "an accurate barometer of the financial state of the nation".
Mr Tomlinson added: "The number of people in financial difficulty coming to see us since the beginning of the year has shot through the roof and the short term economic outlook doesn't suggest that we are likely to see less people coming through our doors in the months to come.
"Many are struggling with debts or a mortgage that they took on during the good times, and now find themselves in a position where they simply don't have the means to pay those debts."
The service received a £10 million funding boost in the Pre-Budget Report, which has allowed CAB to help an extra 335,000 people.
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