Debt takes its toll on Ashfield residents

NMAC12-0023-2''Dept caseworker Deborah Hughes pictured at Sutton's CAB office
NMAC12-0023-2''Dept caseworker Deborah Hughes pictured at Sutton's CAB office

THE news is full of worrying stories about the financial crisis, telling terrifying tales of shrinking economies, failing businesses and tumbling stocks and shares.

But while these troubles seem far away from the everyday life that many of us lead, the true toll of the credit crunch is hitting hard for many Ashfield residents.

The district’s Citizens Advice Bureau, on Market Street in Sutton, has seen an increase in the number of people coming through the doors seeking help with debt.

And with post-Christmas credit card bills set to land on doormats any day, this is a trend that is not going to go away.

Deborah Hughes, a debt caseworker at the CAB, said that since around the middle of last year she has been seeing more people who are at risk of losing their homes after missing payments on their mortgages and more people with multiple debt problems.

“The problems seem to be more complex than they were before,” she said.

“People come in with credit cards, store cards and loans, warrants for disconnection of gas and electric - a lot of them have multiple issues which creates a lot more work and a lot more stress.”

The causes of this escalating personal debt are often, said Deborah, unemployment and ill health, especially mental health issues.

“Hours are being reduced or they have lost their job, then it impacts on their health,” she said. “A lot of clients have depression or anxiety and that prevents them from going forward and getting another job.”

Last financial year, the Ashfield CAB dealt with over £14m of debt - around £2.5m more than the previous year.

Its caseworkers saw a 42 per cent increase in bankruptcy-related issues and a 65 per cent increase in debt relief orders - which you can apply for if you cannot afford to pay off your debts and owe less than £15,000.

More people are also turning to so-called ‘payday’ loans, but they often find that the huge interest rates mean that debts soon mount up and become unmanageable.

One client of Deborah’s had taken out 15 different loans from internet services and ended up owing thousands of pounds when they could not pay them back by the deadline.

Other effects of falling household incomes include more Ashfield folk not being able to pay their gas and electricity bills or to top up the meter, meaning they are forced to sit at home in the dark and cold.

And young families are often left struggling to make ends meet because of the many and varied demands on their money.

“They have not got enough money when we do a budget with them, even for clothes and shoes,” said Deborah. “We get clients who cannot afford a washing machine and they have five or six children.”

Another recent pattern that the CAB has seen is a rise in the number of older and elderly people who are in debt.

“At one time it was very rare to see the elderly but we are getting more retired, pensioner age people in now, which is quite alarming, that they get to retirement age and are going to lose their house,” said Deborah.

“They may have taken out an endowment that’s not covered their mortgage at the end of the term.

“A client could owe £80,000 on a mortgage and if the endowment is worth only five or £6,000 it’s impossible to raise the surplus on that.”

Other people suddenly finding themselves in difficulties are those who were in a secure financial position and used that to help their children out financially.

“It’s not that they have been frivolous with their money, it’s a sign of the times,” said Deborah.

“They have been very careful and had savings but have helped their children out and ended up with nothing.”

There is still a social stigma associated with getting into financial difficulites, but Deborah said that anyone who finds that they cannot pay their bills should seek advice.

“We look at all avenues with people but the key is to get advice straight away,” she said.

“We have had some really good success stories which is really nice.

“To get a grant or something to help somebody when they really need it - they are so appreciative.”