Debts & Loans

THE CITIZENS' Advice Bureau (CAB) in Carrick has reported a massive 160% increase in enquiries from people asking about bankruptcy, as the credit crunch begins to bite.

Staff at the CAB's offices in Truro and Falmouth compared statistics for the second quarter of this financial year with the same period last year and found that more and more people are wondering whether bankruptcy might be a solution to their financial problems.

In addition, statistics for all enquiries to the CAB locally show that the offices have already handled more enquiries in less than nine months of this financial year than they did in the whole of last year.

Jim McKenzie, a CAB Cornwall manager, said: "There is no doubt that people are feeling the effects of the financial crisis.

"We are currently handling more than 5,000 enquiries from people a year, either over the phone or in person, and the figure looks set to rise.

"Enquiries for advice on bankruptcy have risen 160% year on year, and on debt issues by 68%.

"Other areas where people are becoming more concerned include employment, 31% up on the same period last year, and looking set to rise further.

"These include enquiries from employers as well as employees. More and more people who employ just one or two people are having to make difficult decisions.

"Some employers in Cornwall tend to think their accountants are employment specialists and fail to take additional advice to make sure they do things properly if they have to make someone redundant.

"We would much rather they come to us to check before there is a problem."

Other areas where the CAB expects to see significant rises in enquiries include housing and relationship issues, particularly after Christmas.

Mr McKenzie said: "One in 10 of the clients we see are concerned about family breakdowns. Traditionally we see more people about relationship issues after the Christmas period, but debt problems are now putting added strain on families.

"One other area of concern is the buy-to-let market, which could create problems for people who are tenants of landlords as well as those who have their properties repossessed.

"Across the whole of Cornwall we have already seen 75% more people at risk of losing their homes in the first quarter of this year compared with last."

The number of increased enquiries puts significant strain on CAB staffing and finances.

The service, which is run as a charity, receives some funding from Cornwall county and Carrick district councils, and survives with the help of grants from other agencies.

However, grants cannot be guaranteed, and funding from the new unitary authority for Cornwall for the coming year has not yet been confirmed.

Mr McKenzie said: "We're trying to be optimistic, but we are very concerned. We need more volunteers to cope with the increased number of enquiries, but the Catch 22 is that we also need more trainers to train them, which is an added cost."