People struggling with personal debt have shared their feelings of shame and fear about asking anyone for help. When Money Saving Expert founder Martin Lewis asked Twitter followers to share their experiences with Citizens Advice, National Debtline, the debt charity StepChange, and other organizations offering debt advice, responses revealed that many of those whose finances were out of control had not asked for help. out of embarrassment.
Mandy wrote: “I was embarrassed to have gone [to Citizens Advice] and I couldn’t take care of it myself. I still do now and I’m too scared to call someone in case they laugh at me.
Another, Michael Harmison, recounted how he racked up over £ 8,000 in debt after losing his job in 2017 and described being “in a really dark place” before concluding a debt repayment plan with the help from StepChange.
“I contacted them in January 2018 and have paid all my debts since,” he wrote. “I have about a year left, but I felt like a huge weight had been lifted and I feel better.
“The money problems I had are now all gone and with the help of my loving wife and StepChange I have started to become more financially stable and we are looking forward to our first vacation and saving for a house together. . ”
Gail Jackson shared another person’s experience: “The stress the debt caused me was unbearable, I just couldn’t see a way out because all I could pay for my debt was only to cover it. the interest, so the debt was still there – a continuous cycle that was affecting my day to day life.
“I called CAP [Christians Against Poverty] and that turned out to be the best thing that has happened to me in a long time. They immediately wanted to help me. They listened to me, didn’t judge me, and immediately got to work helping me with my debt. I’m back to a happy place in my life, all thanks to CAP.
“This is only the solution”
Sue Anderson of StepChange said no one should feel unable to seek help from professional organizations.
“It’s important to recognize that there is not just one factor to problem debt,” she said. “For the most part, it’s some kind of shock or life event that often acts as a trigger.
“People who manage financially often become unable to juggle their commitments when an illness or a romantic breakup occurs. What matters to us is not the reason for someone’s debt, but the best solution to help them solve it.
Yesterday was Black Friday, a day when retailers cut prices during a flash sale to encourage spending before Christmas time.
Earlier in the week, Nationwide predicted that Black Friday spending would rise 32% from its pre-pandemic peak after a 2020 drop. The construction company predicted its members would spend more than £ 251,000 per minute on Black Friday. But her research also found that one in three people were still worried about paying for Christmas, and one in four expected to take on more debt next year.
Separate figures from Financial Wellness Group revealed debt problems were compounded by an increase in the popularity of Buy Now, Pay Later (BNPL) services, which allow you to pay for items in installments with interest. only charged if payments are late. He revealed that the number of clients seeking debt advice who have outstanding BNPL loans has quadrupled since the start of the pandemic.
Affordability verification issues
Deborah Ware, COO of Financial Wellness Group, urged customers to consider whether or not they could afford to refund any BNPL payment before making a purchase.
“BNPL can be a flexible and inexpensive form of credit – when it is managed appropriately. However, we remain concerned that BNPL’s lenders are not doing enough to verify whether clients can afford the expected repayments, ”she said, adding that if you are worried, it is best to ask for help as quickly as possible.
Ms Anderson added: “Unless you have experienced debt, you may not realize how many potential approaches there are to solving it. Since May, important additional protection has been put in place which can really help some people as well – the possibility of a statutory 60-day ‘breathing’ period, during which creditors suspend all collection activity, allowing for people to work with debt counseling. organization like us and start putting in place a sustainable strategy to deal with their debt.
“When we work with clients, we consider their entire financial situation. From there, we can determine which potential debt solutions might work for them and rule out those for which they would be ineligible. “
A homeowner cannot claim a debt relief order, for example, and some debt relief solutions are unique to Scotland or not available in Scotland.
“Always the choice of the customer”
“We then recommend the approach that we think is the best fit, but it is always the customer’s choice and if they prefer a different tailored solution, we will assist them in their choice,” Ms. Anderson added. Most of StepChange’s customers are tenants – around £ 360million in rent debt has been racked up during the pandemic, according to the charity.
“We see women, single parents, and people claiming universal credit disproportionately represented among our customers,” said Ms. Anderson.
“One of the things the pandemic has strengthened is the strong link between low income and debt. We have seen households that were already the least financially resilient to be even more in demand. Often, indebtedness is the consequence of a lack of sufficient income to cover the essentials and of missing loans or payments to meet them.
The natural instinct of many people is to try to fend for themselves, but this often leads to new borrowing when they are struggling to pay for essentials, such as food. By the time people seek advice on their debt, it has often made their situation worse.
“Debt is not something to be embarrassed about – it happens, and it happens to a lot of people,” Ms. Anderson said. “Over 300,000 people a month visit our website, so if you’re worried about debt, don’t suffer in silence. Help is out there, from us and other reputable debt counseling charities.
“Be careful if you search online for debt advice, as there are a lot of scams out there pretending to be real charities. If you’re looking for StepChange, the website address is stepchange.org – nothing else.