Debt charities facing a busy January

27 December 2007

New year financial hangover will see many calling for help

This January is predicted to be the busiest on record for debt charities as consumers start to worry about their finances for the year ahead.

Two of the leading debt charities, the Consumer Credit Counselling Service (CCCS) and Credit Action predicted that this January would see them receiving more phone calls from worried borrowers than in previous years.

A spokesman from CCCS said: “We expect just under 34,000 calls to our helpline in January 2008, 5 per cent higher than in 2007.”

Tens of thousands of borrowers have been left crippled by the recent credit crunch and five interest-rate rises. The 0.25% cut in the interest rate earlier this month was hoped to help these stricken borrowers, but many lenders have not yet passed it on.

Additionally, according to the Association of Payment Clearing Services, an extra £3bn was put on credit cards this month taking last December’s total of £31bn up to £34bn.

Chris Tapp, from Credit Action, said: “The nature of calls might be slightly different. It used to be about unsecured credit, but mortgages are becoming a much bigger problem than they were as rising living costs squeeze homeowners.”

According to the Royal Institution of Chartered Surveyors, the number of house repossessions is predicted to increase by 50% next year to 45,000. Mortgage lenders are urging borrowers to contact them immediately if they think they may start to fall behind in their repayments.

If you are worried about your debts you can get help and advice for free from the CCCS on 0800 138 1111.