Citizens Advice Warn Debts Could Take a Lifetime to Repay
A report from Citizens Advice has startlingly revealed that it could take, on average, 77 years for UK citizens to pay off their debt, including credit cards, store cards and personal loans. The consumers the charity is referring to are those who seek help and advice from Citizens advice.
The reason for this is due to the majority asking for help with debt from the Citizens Advice earn half the national income.
The report stated that many of the charity's clients were caught in a vicious cycle of low pay and extremely high debts. Being ill informed regarding financial products also plays a part in some consumers drowning in a pool of debt.
David Harker, chief executive of Citizens Advice, said: "Low income, combined with badly informed and poorly understood financial decisions, are at the root of many of our clients' debt problems.
"The reality is that they are condemned to a lifetime of poverty overshadowed by an inescapable burden of unpayable debt."
Many are even unable to afford the fees payable for declaring bankruptcy, adding to the debt burden as this avenue of debt relief is closed to them.
Those seeking help from Citizens advice had, on average, debts of £13,000, mostly consisting of credit card and loan debts. The numbers of people needing help with their debts has double within the past eight-years.
One method for helping relieving the debt burden for some, according to Mr Harker, would the Government introduction of Debt Relief Orders.
DRO's are aimed at those on low incomes and have debts of less than £15,000. Whilst similar to bankruptcy, they are cost less to initiate.
These orders could offer a ray of hope to those most in need of help with their debt problems.
Alisdair Milton
24th January 2007
More Information:
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