Debt helpline calls rise 25% as "new penury" strikes
By myfinances.co.uk staff
Calls to the Consumer Credit Counselling Service (CCCS) helpline rose by 25% in 2009 to a record 335,323 contacts, the charity has said.
It added that the recession appears to have triggered a "new penury" among more cautious households who have nevertheless found themselves unable to repay their borrowing.
Traditionally, over-indebtedness has been classed as owing over 20 times net monthly income but last year, almost three-quarters of CCCS clients owed less than this.
Nevertheless, nearly one in three people coming to the charity for help had neither the budget for a Debt Management Plan or Individual Voluntary Arrangement, nor the circumstances to qualify for insolvency.
CCCS chairman Malcolm Hurlston said: "It is rare for an annual review to reflect such rapid change. The new penury has struck many people who would ordinarily not have fallen into debt on the basis of their borrowings alone."
The charity said the number of CCCS Debt Management Plans in place last year rose above 100,000. These covered £3.3 billion in unsecured debt, of which £251 million was repaid over the course of 2009.
According to its report, credit cards accounted for 46.3% of the total debt, while personal loans made up 39%.
Recent figures from Credit Action showed the average household debt in the UK, including mortgage repayments, stood at £58,040 in January.
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