More than a third of people in Ashfield are in personal financial difficulty as the growing personal debt crisis grips the country, new figures reveal.
The shocking figure showing two in five people are struggling to make it to pay day.
The research carried out by insolvency trade body R3 paints a damning a picture of the struggle many people now face just to get to payday due to household bills like energy or rent, or repaying credit cards and payday loans.
Ashfield MP Gloria De Piero has vowed to tackle “cowboys” making money out of debt management advice and legal loan sharks profiting from the situation.
The MP said; “As well as action on our energy bills, I’m backing plans to get tough on debt management companies, to make sure people have access to good debt advice and alternative affordable finance.
Ms De Piero added; “Anyone here in Ashfield worried about their debts or worried about debt in our community should get in touch with my office.
Millions of people are now turning to payday lenders just to cope with the cost of living and debt repayments.
Many people have little or no savings and if interest rates rise or rents continue to go up it could force more families out on the street or becoming so called zombie debtors- paying just the interest not the capital on their debts.
In Parliament, the Ashfield MP vowed to support Labour’s amendments to the Consumer Rights Bill to address the fees that debt management companies charge as well as pushing for a levy on payday lenders to pay for debt advice provision.
Eller Ferris of the Mansfield branch of the Nottingham Credit Union, said: “We come across people who have entered into debt management and it is a very cynical process. People are signed up onto products not suitable for them.
She said Individual Voluntary Arrangements (IVAs) were being sold as a Government loophole to get people out of debt, adding:
“For some people it is a legitimate way of paying for things if they have life problems, but it is akin to bankruptcy.
“It might look like an easy solution but when you apply for credit in the future you will have a big black mark to your name.
“There are other ways like the CAB Pay plan or call the credit union, where people can go and have other arrangements rather than going to a company that will charge you for this.”