Transact - more people seeking help for debt problems

Transact, a national debt advice organisation, has said that the credit squeeze is leaving many professional people and homeowners struggling to cope with their debts.

The organisation, which represents over 1,200 debt advice centres, said its branches in some of the most wealthy regions of the UK are now being inundated by demands for help.

Demand for advice was escalating across the country, however, the rise was most significant in middle-class areas, explained Transact.

At its advice centres in Haywards Heath and Congleton, the organisation has noted a 100% increase in enquiries over the last 12 months alone, with some experiencing such a high level of demand that they had to turn people away.

Transact has received an additional £55 million from the Government over the last 3 years to fund an extra 500 debt advisers. However, it said that the focus was on inner-city areas where the increase in problem debt has been less severe.

Jamie Elliott of Transact said that debt advisers were seeing a new type of client. In the past, it was mainly people on benefits, people in social housing who went to debt advice agencies.

However, since the start of the credit squeeze, the organisation is experiencing a vast increase in professional people and homeowners coming to seek help. These people have just been pushed over the edge and now can’t cope with their outgoings, explained Mr Elliott.

As a result, there is much less debt advice to go round, concluded Mr Elliott.

In related news, accountants KPMG recently predicted that a million county court judgments will be issued this year, up from almost 800,000 in 2007 and nearly double the 538,383 judgments recorded in 2004.

County court judgments relate to unpaid debts including on credit cards, personal loans, car loans and store cards. They are often followed by visits from bailiffs, who can seize property in order to enforce the courts’ decisions.

Over 2,700 individuals each day are struggling as they cannot afford to keep up on loans, credit card payments and utility bills.

Research from KPMG said a decade-long borrowing binge has pushed personal debts beyond a record £1.4 trillion.

Discuss this in the Finance Markets forums

Story link: Transact - more people seeking help for debt problems