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Hanging On To Debt By Your Fingernails

The Royal Bank of Scotland records profit losses

The Royal Bank of Scotland is the latest bank to record substantial profit losses, and questions are being asked about what the future now holds for the economy, lending and people’s personal finances.

On this morning’s BBC Today programme, Terry Smith of bonds broker Tullit Prebon, forecast that people’s personal finances could get much worse, and that a future rise in UK individuals with debt problems was a ‘time bomb’ waiting to explode.

Hanging on to debt – increased living costs

Recent personal insolvency and bankruptcy figures did not rise, suggesting that somehow, people are managing to cope with the increased demands on their income, including rising household food and energy bills and increased petrol costs. However, as Terry Smith also pointed out:

“When things go wrong for borrowers, they don’t immediately rush in and inform their bank. Basically, they tend to hang on by their fingernails for as long as they can.”

Last minute debt problems

This is a fact that debt advice organisations such as Payplan experience first-hand. Amanda Ryans, Payplan’s Debt Helpline manager, also recognises this fact. She said:

“Many clients call us with serious debt problems, and many of these could increase their options by calling us when things are beginning to go wrong.

The problem is that sometimes a debt situation’s been building up gradually for several years until something gives way. Unfortunately for our clients, it’s often a significant event that triggers their first call to us – a relationship breakdown or loss of a job for example, and we have to help them pick up the pieces.”

Get debt help sooner than later

It’s clear from Payplan’s experience that someone who’s struggling with debt should get help as soon as the problem is realised, although, this is often much easier said than done, especially when so much can be at stake. The fear of losing a family home for example, can prevent those needing debt help urgently from seeking advice sooner. However, debt advisers are trained to be empathetic and should be the first port of call for anyone who thinks that their debts could be a problem.

Payplan contact details

Freephone 0800 280 2816
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Written by on August 8th, 2008

Filed Under  Budgeting, Debt News   |  Trackback  |   4 Comments

4 Responses to “Hanging On To Debt By Your Fingernails”

Evelyn Guzman says

I just love your website and learned a lot just from the one article I read. You appear to have quite a few tools to help your clients out too.

Evelyn Guzman

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Jo D says

As i want to do the right thing and pay my debts off “I am hanging onto my debt with my fingernails” However the day before my wage goes into my bank account i have gone overdrawn by £ 10.00 and they have charged me £25.00. I have spoke to them and informed them that they are dragging me further into debt; However, they are not trained to be sympathetic and my debt situation has now gone from bad to worse and even more worrying is i am beginning to feel ill.

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Paul says

Hi Jo

When debts start to make you feel ill, and get on top of you, Payplan would always advise that you try and seek advice and support for both your finances and for your emotional well-being. Obviously, Payplan can help you with the financial side of things, however, there are other advice agencies you can talk to who can help you further.

For further support, you could try these links, all of which contain contact information for other organisations that you may find useful, and all of which should be sympathetic to your situation:

http://www.debtquestions.co.uk/useful_links.php

http://www.payplan.com/useful-links.php

http://www.nationaldebtline.co.uk/england_wales/useful_links.php

Hope this helps

Paul

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jimma says

If credit cards are the greatest source of bad debt, auto loans are a close second. You are upside down on the loan the second you drive off the dealership’s lot and it’s downhill from there. Too many people shrug off a car payment as a necessary evil.

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