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Between April and November of 2008, the non-profit advocacy group Citizens Advice Bureau (CAB) reported handling twice as many redundancy cases as they had in other months in addition to a doubling of debt enquiries over the last ten years. CAB stated that on average they have dealt with 7,241 new debt customers on a daily basis, especially with the loss of jobs now increasing to record levels. Customers who sought out help in 2008 were on average £16,971in debt, and one in every ten clients had at least ten credit debt problems that included credit cards, personal loans, overdrafts and hire purchase plans.
Over half of the customers Citizens Advice Bureau helped had household bill debts, with another forty-five percent being behind on their mortgages and secured loans. One in every three customers had half of their monthly income being spent on their mortgages alone. David Harker, the chief executive of CAB, stated, "We have seen an enormous rise in the number of people turning to us for help because they have lost their job, and we can expect to see many more people struggling with severe debt problems as the recession continues."
In order to help as many people as possible, Citizens Advice Bureau had to ask for a £10 million funding boost from the government. The organisation has over 300 centres across Great Britain and Wales, and in an effort to help their customers - an estimated 600,000 extra clients - the centres are remaining open later until March 2010. According to Harker, "For many, there is little prospect of their income increasing or their circumstances changing. The reality is that they are condemned to a lifetime of poverty overshadowed by an inescapable burden of unpayable debt." The figures reported by CAB are a result of a variety of surveys that they have conducted over the last few years that also showed just how hard it is becoming for debt counselling charities to keep up with the demand for help, thanks to the recession. With the increase of customers, charities like Citizens Advice Bureau and Age Concern are having trouble keeping up because they simply do not have enough staff to help out, or the staff they have is unsure what kind of help or support they can give. Redundancy is what 90% of the advisers are saying is causing the case loads to grow.
The surveys taken by the staff of these organisations was administered by Turn2us, another charity that helps citizens of the United Kingdom get welfare benefits and additional grants to help them out. The chief executive of Turn2us, Jolanta Lasota, stated that support for the advisors is crucial in order to keep potential consumers who need help from falling through the gaps in the system.
Starting on April 6, 2009, consumers needing debt help will be able to apply for debt relief orders as an alternative to bankruptcy. Eligible consumers who do not have a home and are struggling with debts less than £15,000 with assets less than £300 and a surplus income of £50 after essential debts are paid will only have to pay £90 for the order that will allow them to discharge their debts within one year. |