Debt worrries after Christmas

It has been reported that more people than ever have entered into the new year burdened with debt as a result of overspending at Christmas time.

The previous 12months have shown a steady increase of people getting into debt with the highest recorded number of people falling into insolvency and there is nothing in the foreseeable future to halt this number rising even further.

Local Citizens’ Advice Bureaus (CABs) are witnessing alarming situations where people’s debt has totally spiralled out of control. The numbers facing a brand new year with huge money worries has steadily increased each year for several years in a row.

CABs are very quiet in December because the people affected are still out there spending in the run up to Christmas, but by January they are inevitably inundated and some people rush in, really quite panic-stricken.

Naturally the credit card bills start to arrive from January, and by February or March some of the worst cases have defaulted on repayments and so on.

A local Leicestershire based CAB reported that in 2004 the average debt his office dealt with was £15,000. The figure quoted for 2006 is £30,000.

Naturally some have even larger figures than this to handle and the CABs see it all, even people who are positively suicidal having run up lots of debt, then taken a bigger loan to try and clear that, then the whole process spirals out of control.

In 2006 alone Britain has been hit by increases to interest rates and utility bills- especially fuel, and certain areas will have been more affected by unemployment than others. All this added to people determined to overspend at Christmas can present huge problems at the turn of the year.

Local councils urge people in these situations to definitely get in touch with financial / debt advisory helplines, since debt consolidation services  can prove to be more costly in the longer term.