Archive for August, 2009

ticking to a tight budget is the best way out of crippling credit card debts, a financial advice charity has claimed.

The Consumer Credit Counselling Service (CCCS) said making “a strict and truthful budget” is the “first step” to getting finances in order.

Using a credit card to withdraw cash is a key sign of a consumer in financial difficulty, CCCS said.

The charity issued the warning after figures were published revealing 43% of those in serious debt are too scared to take action.

Fear is the number one concern behind people’s reluctance to openly talk about their financial problems, the talkaboutdebt.co.uk survey found.

Two in five of those polled said they were finding it difficult to move on in life because of debt problems.

“This stigmatism of debt also breeds mistrust – so people [...] find it hard to open up to or to trust a professional debt adviser”, said financial journalist Jessica Bown.

“The main concern is that while the fear factor is preventing people from talking about debt and seeking help, their debts continue to mount”, she added.

CCCS said consumers struggling with debt “need to take steps to confront [the] situation”.

The Citizens Advice Bureau recently revealed that is has received more than 400,000 queries in the last year from consumers struggling to pay back their credit card balances.

Stephen Marshall said the economic downturn has resulted in the number of clients seeking help increase by over 20 per cent compared to last year.

And speaking to the Lochaber News on Tuesday as he left for a two-day Citizens’ Advice Scotland conference in Edinburgh, Mr Marshall said demand was set to grow dramatically in the months ahead and called for radical government intervention to assist those who are suffering.

The Citizens’ Advice Scotland conference, which concluded today (Thursday), is taking place against the background of the recession which has brought increasing numbers of clients to the CAB. Over 400 staff, volunteers and board members from the 75 CABs throughout Scotland are meeting to discuss the issue.

Mr Marshall, together with staff and volunteers, is in Edinburgh to discuss the devastating impact the economic situation is having.

He said: “This is a crucial time for the CAB service, not least here in Lochaber, with the current recession. The sheer numbers of people coming in to ask for advice now is overwhelming.

“One look at the waiting room at our office in Dudley Road will show you that we are under pressure. We have roughly the same number of advisors, but over 20 per cent more clients than we had last year.

“There has been a large increase in demand for advice relating to debt and benefits, with housing and employment also on the increase and there is no reason to believe that demand will not continue to grow dramatically.”

He revealed: “There has also been an increase in the complexity of the cases we see.

“A client may have got into credit card debt, then lost their job, so they default on their mortgage or rent, which leads to threats of repossession and homelessness, all of which can lead to further debt, then depression, family breakdown etc. And this is not an extreme example. Many people are really suffering at the moment. We regularly see clients who are in tears or very deeply depressed.”

Mr Marshall said the downturn meant the CAB service is needed more than ever but added that people affected by the recession also needed more help from government.

“We need wholesale changes in public policy in a number of areas, and that is the message I will be taking to the conference,” he said. “I want to make sure the CAB service as a whole stands up for the needs of the people we represent.

“So I will be urging my colleagues from around the country to get together and use our collective might to put pressure on our political leaders.

“With a general election looming, politicians will be listening more than usual. I’m determined that the CAB will shout loud on behalf of the people who are suffering.”

Mr Marshall said people can have a role in supporting the work of Lochaber CAB.

He said: “One thing that would help us enormously here would be if more people would come forward and volunteer with us. We need people who can spare five hours per week in our Dudley Road office.

“It’s a very friendly place to work, and we will give full training to potential advisers.

“So our message to anyone who has ever considered voluntary work is that the CAB is a great place to start and there has never been a better time than right now.

Debt is the biggest concern for those seeking help from Citizens Advice Scotland – with a 14% rise in debt-related issues in the last year.

Its annual report revealed debt made up for almost 30% of the 976,989 issues advisers handled in 2008-09.

The number of inquiries related to redundancy doubled in the same period.

Delegates at a conference in Edinburgh marking the charity’s 70th anniversary will be told the recession will lead to an increase in problems next year.

Citizens Advice Scotland Chief Executive, Kaliani Lyle, said while there were signs of “green shoots” in the wider economy, the situation remained bleak for many.

‘Dreadful circumstances’

She said: “The fall in income, the threat of redundancy, the spiralling debt, the disappearance of reasonable credit, the lack of affordable housing and the spectre of homelessness – many are suffering combinations of all of these things, and the result is often depression, illness, family or relationship breakdown.

“This is the reality. And it’s hard to talk the language of recovery when you are dealing face-to-face every day with people who are living with such dreadful circumstances.”

The report said the largest increase for any area of inquiry was for legal problems, including bank and earnings arrestments and sequestration, which were up 19%.

Social security benefits issues also increased by 10%, accounting for 26% of all issues raised.

A Scottish Government spokesman said minsters were working with bodies, including as Citizens Advice Scotland, to help families in need of debt advice.

This included, he said, £3m for extra in-court and other advice services and boosting the Home Owners’ Support Fund to £35m.

The report was based on inquiries at each of the 71 Citizens Advice Bureaus in Scotland.

The figures do not represent a head-count, as individual clients may have asked for advice on a number of issues.

http://news.bbc.co.uk/1/hi/scotland/8196090.stm