Debtors struggling to make repayments
More borrowers were struggling to pay off their debts last year than previously.
That’s according to research from the Consumer Credit Counselling Service which found that the number of people who cannot afford to repay their debts or meet basic living costs rose sharply. There were more than 55,000 cases in 2009 compared with less than 14,000 the year before.
Failing to make minimum payments on a credit card, for example, can lead to the racking up of even more debt and a spiral from which it can be very hard to escape.
The announcement comes as the charity prepares to launch a new payment arrangement allowing struggling borrowers with at least two unsecured debts to make token payments of as little as £1 a month.
The CCCS says that in many cases people are experiencing difficulties because they have been made redundant, had their work hours or salaries reduced, or have had avenues of credit closed to them.