Debt Predictions for 2010

What an horrendous start to the year 2010.  The number of people asking for debt management plans has risen by something like 30% on the same time last year and according to both the consumer credit counselling service and Citizens Advice Bureau it's only going to get worse as the credit crunch continues to bite for a huge percentage of UK families. Over 2.5 million unemployed and a credit and money lending criteria that is now tighter than, a gnats......well you get the picture, all mean that insolvency is on the increase. As the image on the left shows, year on year average household debt has increased with a large jump last year in particular.


For a family who have lost their main income and still have bills and mortgages to pay as well as mouths to feed, what options are there available that can ease their financial situation in the short term and still ensure that they keep a roof over their head?  It can seem like there is no assistance out there for people with a less than squeaky clean credit history and unemployed status and indeed there are very few options. Families who are in a stressful financial situation could find that debt management plans help them avoid suffering as a result.  A good debt management plan will look into all the ways you can make savings and will also look at all your potential state entitlements.  Currently there are a huge amount of families not claiming housing benefit that could be claiming, even if it is a small amount.  Hey, when you're in debt even the smallest amount can help!   There is also a lack of confidence in the  current Tax credit system.  Overpayments later requiring lump sum repayments through no fault of their own and a perceived difficulty in claiming, although it is actually relatively easy, all add up to a large number of families that could be due some assistance, missing out.  Overall, something like 16 or 17 million GBP in means tested benefits are unclaimed every year.  A portion of that cash, however small, could go some way to making a debt ridden families life just that little bit easier.


it doesn't make the situation any easier when the economist's can't even make their minds up as to whether or not we are officially out of the recession yet. Are we or aren't we?  It appears that consumer confidence hasn't yet returned to the borrowing market.  Loans, both secured and unsecured, although clearly more difficult to get, still are at a very low level.  Consumers are loathe to borrow money in difficult economic circumstance.  Of course, when you are uncertain as to whether you will retain your employment - why would you want to put yourself in the position of borrowing money longer term, particularly on the higher rates on offer.  It could essentially be that banks, credit companies and money lenders loosening their strict lending criteria will result in increased consumer confidence in the sector, we shall have to wait and see because it will be a little while off just yet.  In any case predictions for 2010 remain dire with the majority of debt industry experts stating that debt and insolvency cases will continue to rise - a situation we could all do without.