Debt problems rising fast

8:35am Wednesday 27th August 2008

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The credit crunch is biting hard with the numbers of people needing help with debt problems rising fast, according to the Citizens Advice Bureau.

The Epsom and Ewell Citizens Advice Bureau says it needs to appoint a full time debt advisor to cope with the increasing work load.

It has already had to restrict the number of people that it can support by taking over negotiations with creditors.

“We have been increasingly concerned at the number of debt problems that we are seeing and our ability to manage these complex cases with the resources that we have,” writes Shaun Jones, CAB chairman in the CAB’s annual report.

The number of meetings with clients has increased by 13 per cent in the past year.

Debt, benefits, housing and employment problems account for more than 60 per cent of inquiries to the bureau.

The latest figures show an increase in inquiries about redundancies and bankruptcy, council tax and mortgage arrears.

Ann Flower, manager of the Epsom and Ewell CAB, said: “We are monitoring things closely.

“These are only based on quarterly figures but compared with last year we have seen inquiries about bankruptcy rise to 11.8 per cent compared with 4 per cent but that is as a percentage of the debt inquiries.

“Redundancies are up from 3.3 per cent to 9.4 per cent but again we have to be careful. We don’t know if this is a blip or a trend beginning to show itself.”

While the CAB is struggling to cope with debt inquiries it has successes to report including gaining more than £242,500 for clients by helping them with benefit claims and similar problems.

The CAB court desk at Epsom County Court prevented homelessness on the day of a hearing in 80 per cent of the mortgage and rent arrears cases it dealt with.

The mental health outreach team, which needs more funding to continue its work, says that 70 per cent of the queries it dealt with concerned benefits and debts.

Cases of what CAB describes as “inappropriate lending” including a bank which granted a £9,000 loan to an 80-year-old on a basic pension are to be reported to the social policy department of the national organisation.

• What do you think? Have you been hit by the credit crunch or rising interest rates? Let us know what you think in the comments section below.