Debt solution company, ClearDebt, believes today’s government personal insolvency figures reflect a worsening in people’s ability to repay debt.

Commenting, ClearDebt CEO, David Mond, said:

The 6% increase in bankruptcies and debt relief orders between the end of 2011 and the beginning of 2012 indicates, we believe, a worsening in the circumstances of many indebted individuals and that some are giving up all hope of repaying their debts and electing to become insolvent instead. This is backed up by our experience, where ClearDebt has seen a small increase in the numbers of people in debt management plans where we have actually recommended bankruptcy instead, but our clients resist such advice.

Whilst, year on year, personal insolvencies are down, I don’t believe that fee-charging debt resolution companies, like ClearDebt, are seeing a fall in demand for our services. It’s significant that there were more Individual Voluntary Arrangements in the first quarter of 2012, than a year ago and that bankruptcies also increased, quarter on quarter.

It isn’t just new cases where things are changing though. As a company, we have seen a significant number of debt management plans where we have found that the client’s circumstances have worsened and we’ve had no choice but to recommend bankruptcy. As more people become unemployed so their ability to repay debt decreases. And a double-dip recession makes it more likely people will need to look for ways out of repaying debt, like bankruptcy. They in turn, will then be unable to play a part in increasing the consumer spending we are told is necessary to make the economy grow.

-END-
For further comment on the insolvency statistics please contact either:
Andrew Smith- Andrew.smith@cleardebt.co.uk, 0161 968 6825, 0791 240 7532
or
Sally Hardiman- Sally.hardiman@cleardebt.co.uk 0161 968 6815.

In this video from The Guardian, John Harris documents a credit union, Dragon Savers in the Rhondda Valley, South Wales and its customers.

Credit Union loans are an alternative to getting a payday loan and have become more widely known in recent times with the support of high profile public backers such as the Walthamstow MP Stella Creasy. View this then VOTE in the poll below.

In Ireland, 50% of the population are members of a Credit Union. In America and Canada, the figure is around 40%. In Australia and New Zealand it is around 25%, but it is closer to 2% in the UK. Despite that, at least 86% of people are eligible to join a Credit Union in England, Scotland and Wales on the basis of where they live and the working areas that are served by Credit Unions.

Stella Creasy, 2010

View This Poll

The comments in John Harris’ film from the local community in south wales may be indicative of a wider low awareness of the role of credit unions. The availability of credit union loans and the general awareness of them, is the focus of this poll. Vote now, in the anonymous poll.

Let us know your views on Credit Unions in the comments. We would be delighted to hear your experiences irrespective of your situation. You may comment using an existing profile or using a pseudonym as you wish.

‘It’s that first step which is the hardest’ our client John explains. When faced with a daunting decision or admitting you are out of your financial depth the first step is the difficult part, the rest is just a case of momentum.

John had made the first difficult step and contacted Abacus our sister company when he found his situation overwhelming; we were able to provide the momentum he needed to get his life back and see an end to his debt problems.

In his own words John explains how his money worries began simply enough but quickly spiralled out of his control and how, with our help, he is on track to a debt free future.

I was going through a divorce at the time and working abroad in Saudi Arabia when my money difficulties first began.

I had a medium to large overdraft that I had gone slightly over on a couple of times previously, however this time the bank refused to allow it and removed the facility in an instant.

All of my wages were going into the account but I couldn’t access it; I was left with no money to pay the bills and the threatening letters and calls soon mounted up. I just didn’t know what to do or where to look. I was completely at a loss.

As I was in Saudi I felt even more desperate. I decided to look online where I found the Abacus website, filled in my details with my Saudi Arabian number and doubted if anyone would bother to call.
To my surprise, on the day I asked for a call I was contacted.

From that first contact I was put at ease and knew I was in safe hands. I was reassured that even though I was abroad they could still help me.

I described my situation and gave my accounts, bills and monthly payments, including commitments in the UK. They explained the best solution for me and how they could organise the monthly payments to everyone I owed.

I was still worried about letters and phone calls about non payment but again I was put at ease and informed that any letters or calls should be passed on to Abacus as they would take care of it for me. They certainly kept the wolves at bay and more importantly – from the door and by doing that, it gave me time to sort my life out.

My debt management plan had just over a year left to run when Abacus managed to help me claim back money from a mis-sold PPI policy. Using this money wisely, and offering full and final settlements to creditors, they helped me clear all but one of my debts.

Finally with this one debt left I now find myself with only a few months left until this episode of my life is finally behind me.

I found everyone I spoke to at Abacus to be efficient, honest, responsible, and very reliable but most of all they are caring and understanding. No problem was too big or small for them to sort out. I was dealt with in an exceptional professional manner; a team with great people skills. This is a company that care about you as a person.

I hope by reading this many others will be encouraged and take that first hard initial step too.

Thanks once again for helping me get my debts paid off and my life back on track.

Frugal = something which costs little, or is inexpensive.

Right now most of us are watching the pennies more closely, looking to save money where we can and live a little more frugally. With this cookbook we hope to help people do just that.

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It was created with the generous support of 55 fabulous food bloggers who kindly donated their recipes for inclusion within this book. With recipes for light bites and snacks, soups, salads, hearty main meals and of course desserts – there’s something for everyone.

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This month comparison website uSwitch.com claims one in ten women are forced to cut short maternity stay with their newborn babies due to money worries. The report also confirms the belief that nearly a third of mothers end up £2,500 in debt while preparing for their new arrival.

As someone who has been through this very experience, I decided to swallow my pride and share my story with The Sun to try and show people that this can happen to anyone; more often than not, it’s not about overspending or being careless with money, it’s about a change of situation which means that your income decreases and therefore the challenge of covering your monthly costs becomes a constant worry.

My story started in the summer of 2008 when I was six months pregnant. My husband and I had savings prepared for the new arrival and we were confident that all costs would be covered when I took a few months off after the birth before returning back to work.

Jacqueline and her daughter Savannah

But unfortunately, the first signs of the recession hit and as we worked for the same company, when it went into administration, we were both made redundant. Whilst we had saved for one of us being out of work for a few months after the baby, we certainly didn’t have enough savings to cover both of us being out of work. Our world was truly turned upside down and it was time to sit down and go through our income (which was pretty much zero) and our outgoings, and work out how on earth we would cover our essential costs.

I was lucky enough to join the Marketing team at ClearDebt around a month after we went into administration but left for maternity leave just 12 weeks later. My husband was unable to get permanent work until just before my daughter was born, however his new employers had overestimated their budgets and shortly afterwards, let him go. My daughter was just two weeks old. Again we had no money coming in and the savings which were originally saved for when the baby arrived had been used to supplement the single income we’d had for the previous four months. I had no choice but to return to work when she was just 6 weeks old.

Luckily, five months later my husband found work and my daughter went into full time child care. So, the story does have a happy ending after all ;)

The point of it all? Of sharing this with you and the readers of The Sun?

Because it matters and because sometimes, tough situations come to face good people – like you, like me.
The perception of what kind of people fall into debt is changing – most people in this country have debt – be it a credit card bill, a mortgage or much more; the emotional burden of paying off that debt is huge. So when the issue of women on maternity returning to work early hits the headlines, I feel it’s time to hold my hands up and share my story – after all, I’ve certainly been there, done it and got the t-shirt.

What now?

The problem with a lot of these reports is that they come out, hit the headlines and then go away quietly to the back of beyond until the next report with similar statistics comes along. I’m hoping this time it will be different. Doubtful though.

Many women on maternity receive just £135.45 per week after the first six weeks of their maternity leave – this just about covers the cost of the milk, nappies and wipes – but doesn’t help contribute to living costs of a family who have committed to a mortgage and utility bill payments based on two salaries. I’m not suggesting in any way the government should pay for the missing second income, but I do think more thought should be given to this situation and how families can prepare better and be better supported through these times – even if circumstances unexpectedly change.

After speaking on BBC Radio Kent last year about the number of women putting off having children because of financial worries, this is a much bigger issue than some would believe.

My personal opinion is that in this day and age, you can save your pennies in preparation of new arrivals and those who say “If you wait until you have enough money, you’ll wait forever” are out of touch with the effects of the recession. We shouldn’t be opting into debt by having children, we should be saving and preparing financially to provide a secure environment. However, circumstances can change which are out of our control and I’m asking, when that happens, what additional support could be provided?

If you’ve gone through a similar experience, why not share your thoughts with us now too?