Debts & Loans

STRUGGLING families across Dumfries and Galloway have stacked up debts worth a staggering £27 million in the last year.

And dreaded credit card bills make up the bulk of what is owed by people in the region.

Residents are using plastic to pay their rent or mortgage, as well as household bills – causing their debt to spiral out of control.

New figures revealed to the Standard illustrate the true extent of Dumfries and Galloway’s battle with the credit crunch.

A snapshot of just 1,549 local people who are being helped by the Citizens’ Advice Bureau (CAB) show how they owe a massive £27,031.936. And that figure has almost doubled in the last four years from £14.2 million in 2006.

Christine Sinclair of the CAB’s Dumfries office in Irish Street, believes this is only the tip of the iceberg.

She said: “It would be frightening to find out the true extent of debt accumulated within the region. These are just the ones that come through our doors. There will be a lot of other people out there who are trying to manage it themselves or will go through debt management firms. I would urge people to ask for help before it gets too much to deal with.”

In Dumfries alone, 827 people have debts of £14.6 million.

Ms Sinclair, who has more than 19 years of banking experience, says the number of people with debts of £50,000 and more is growing at a fast pace. She said: “In the last year I have noticed more and more people who have debts of over £50,000. I have also been blown away with the amount of credit cards some people have. It is not uncommon for people to have 15 to 20 credit cards.”

They face losing homes, family breakdowns, ill health and bankruptcy, as they try to get out of trouble warns Ms Sinclair.

Figures also reveal that from April 07 to March 08, 1,480 families stacked up debts of £21 million. And in Dumfries £11 million of debt was accumulated by only 717 people.

Christine, who has worked at CAB for four years, blames irresponsible lending and borrowing.

She said: “Banks became very relaxed about lending. It became easy for people to borrow money from their bank. People are struggling because mortgage lenders were offering them five times their salary. People tend to think that, because the bank or building society offers them five times their salary, that it must be OK but, often, it isn’t.

“People also fail to take account of change in circumstances when they have children, lose their job or stop getting overtime.”

Ms Sinclair also believes desperation drove some people to short-term, high-cost borrowing. She said: “For many people who are trying to keep a roof over their head, desperation is driving them to short-term, high-cost borrowing, which will in some cases end in personal disaster. People are being forced to seek more risky and expensive ways to stave off the threat of eviction and repossession.

“When someone comes to see us, we find out what the situation is and if it is an emergency then we fit them in straight away. No matter how bad someone’s situation is we can help them find a solution.”