Many will never be free from debt claims CAB

Officials from the charity the Citizen’s Advice Bureau have recently claimed that the typical person that is seeking assistance with their finances and debts has no chance of actually ever getting out of debt during their lifetime, which is a daunting prospect for the many people that have found themselves burdened with high levels of debt.

The CAB said that the typical person that was asking advisers for assistance owed an average £16,971, and that this could take them around ninety three years to pay off.

The CAB said that there were a number of reasons why people had got themselves into this level of debt, and amongst the more common reasons were being on a low income, illness or disability, loss of a job, and over-commitment. However, some consumers that realistically have no hope of ever being free from their debt may be able to take advantage of a new alternative to bankruptcy, which will come into force in April of this year.

The new alternative is known as a Debt Relief Order, and these will be aimed at those with debt levels below the £15,000, no assets, and very little or no surplus income available.

The CAB has said that around one third of its debt cases will be eligible to enter into the scheme. However, officials from the charity also urged creditors and lenders to treat struggling borrowers more fairly, and also urged the government to look at increasing the number of programmes available to help people in debt.

A senior official from the CAB said: “Low income, combined with irresponsible lending, unreasonable debt collection practices and badly-informed financial decisions are at the root of many of our clients’ debt problems. 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.”

Tags: finance, chance, debt consolidation, development, year, Debt Relief Order