Beating the credit crunch

3:50pm Wednesday 6th August 2008

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MORE Swindon people than ever before are in deep financial trouble as the credit crunch bites.

Citizens Advice Bureau staff say they have never seen such levels of serious debt problems.

The people who come here are from all areas. People’s incomes have been overtaken

Chris Meaden

The CAB, based in Faringdon House in the town centre, deals with between 8,000 and 9,000 clients a year, and staff say about 30 per cent of them are suffering from debt problems.

While that percentage remains largely unchanged, the sheer magnitude of people’s problems has grown alarmingly.

And robbing Peter to pay Paul in the form of consolidation loans is often a shortcut to even greater misery.

CAB advice services manager Paula Austin said: “Something like 32 per cent of all our inquiries between April and this month have been to do with debt.

“This is a small increase on the usual figure, but it’s the nature of the debts that seems to be getting more serious.”

Paula and debt case worker Chris Meaden are on the front line of the bureau’s services for people facing debt problems.

Clients come from all areas and all backgrounds – there is no such thing as a typical case. Chris said: “The people who come here are from all areas.

“You see people, for example, who have highly-paid sales jobs but whose incomes have been overtaken by their cost of living.”

Everybody from the outwardly affluent to those with lower paid jobs, and from the permanently employed to agency workers approaches the CAB for advice. The bureau is seeing more home repossessions and threatened repossessions.

In many cases, people who took out mortgage deals with favourable rates for a limited period are finding themselves in trouble once those limited periods end and the higher rate sinks takes hold.

Other people find that increased costs of living across the board mean there is simply not enough money left to pay the mortgage.

It is not uncommon for CAB advisers to deal with people who feel they have no alternative left but to pay their mortgages with credit cards.

It is not just mortgage holders who are feeling the pinch, though, the rental sector, whether private or local authority, also has its casualties.

Another menace is charging orders, which occur when creditors apply to change an unsecured loan into one secured on the borrower’s property.

This can happen after payments on unsecured debts are missed.

However, the position for people who find themselves in difficulties is far from hopeless.

The CAB offers sound advice to people with debt problems – advice that can mean the difference between sinking and swimming.