Debts & Loans

People with debt problems are turning for help sooner – as debt held by those seeking helps drops.

The Chiltern Debt Monitor shows, on average, someone seeking help is £25,314 in debt – a drop of 3.9 per cent or £1,030.

The average income of someone needing debt help is £23,432 and the average age is 44.

Nathan Gladwell, at Chiltern, explained people are turning to debt help plans earlier due to the rising cost of living, but also banks are closing their credit lines.

"For a number of years people have tried to borrow their way out of debt, but that is no longer possible," he said.

He added the next 12 months should bring recession and more people seeking help with debt.

"A lot of people are living month by month and have no cash to put aside. When one person loses their income, it is panic stations."

Mr Gladwell said the government's initiatives to hold back recessions could aid people are reduce the number of people unable to deal with their debts, but move effort was needed to educate the public about the options open to them.

The advice for anyone struggling is to sit down and work out outgoings and income – and to find a way to ensure income is greater than outgoings.

"You have to look at where you can make cut backs," Mr Gladwell said.

"In these times it is the £100 a month at the gym or hairdresser that will have to go."

Classic signs that someone needs to seek professional advice are:

- Using credit to regularly pay for fuel or food, or to withdraw cash
- Only repaying the minimum monthly repayment on debts
- Eating into savings each month just to afford living costs
- Using one credit source to pay for another. When seeking debt management help, people are advises to opt for one of the four firms with Office of Fair Trading code approval.