Unemployed Trapped with Massive Debts

The situation is serious. According to the Consumer Credit Counseling Service or CCCS, many individuals who have claimed the benefit of JSA (or Jobseeker’s Allowance) have practically no way of making repayments of the amount claimed since they are already deep in unsecured debt.

Figures reveal that 14446 individuals who have already contacted the CCCS for assistance with this unsecured debt through the first half this year were making JSA claims, and this puts the number at about three times greater than those who are making these claims also but without the additional baggage of unsecured debt. It is clear that they are in dire need of debt management plans and advice.

The average debt owed by these individuals makes for alarming reading. They owe on an average £15,412 to a minimum of five different creditors, and that is the reason why the chances of them being able to repay the JSA claimed is very slim.

CCCS chairman Malcolm Hurlston opines that the scourge of unemployment is so severe that individuals with no option but to take loans in order to meet their daily needs end up getting trapped in huge debt and find it difficult to come out of it even after many years.

He adds that the government must be careful about the impact welfare cuts would have on those dependent on benefits and make sure that they are not bringing many others into this vicious cycle of debt.

The charity organisations have worked out that even if these individuals utilised their weekly allowance in making repayments, they would still require close to five years to get out of debt.

About twenty five percent of these individuals put the blame on unemployment as the primary reason for this accumulation of debt.

The CCCS also shared figures of self employed individuals who are also trapped in debt. More than 6500 people who are entrepreneurs and earning their livelihood through self employment are in great need of UK debt management advice.

The CCCS is in a position to provide assistance to only about 1600 as the others had already built up a deficit budget.