Debt expert warns of deepening debt crisis

Debt solutions expert and DEMSA member, Atlantic Financial Management is warning of a deepening debt crisis in the UK following this week’s triple whammy of figures showing rising inflation, an increase in those seeking Jobseeker’s Allowance and a fall in business confidence. 

July saw the largest monthly increase in people claiming JSA since May 2009, up 37,100 on June. Correspondingly vacancies were down by 22,000 in the three months to July 2011, the lowest number since November 2009.

In addition, new research has found that a north-south divide is developing among struggling homeowners, with borrowers in the North of the country 35 per cent more likely to be in arrears than those in the South.

Kevin Still, Director of Atlantic said:

“We know from the weekly shop and the cost of filling up the car that day to day life is getting more and more expensive and this is not helped by the fact that wages and other forms of income are not increasing in line with this rising cost of living.  

“Compounding this, the latest business confidence indices show that employers are not optimistic of growth in the near future. 

"This is likely to have a knock-on effect on consumer confidence and a stagnant or declining employment market.

"Indeed, The Chartered Institute of Personnel and Development said this week that more employers planned to cut jobs than increase staffing levels in the third quarter and those working in the public sector will be hit hardest.

“Loss of income remains our primary reason for starting a debt solution with Atlantic.  If redundancy and unemployment is included then almost half of Atlantic clients (47.42%) entered a DMP in the past tax year for this reason. 

"This can put immense pressure on household budgets and it is imperative that consumers prioritise their payments, putting mortgage/rent, council tax, essential insurances and utilities first.

"Talking to your providers can help and if you are going to miss contractual payments to your unsecured lenders then taking professional debt advice may be a serious consideration.”

“While predictions of mortgage rates falling will bring some relief to struggling households, the longer term picture is looking bleak. 

"The key is to recognise when you need help and take control of the situation at the earliest possibility. For the sandwich generation, with teenagers at home with poor prospects of employment and elderly parents to care for, finances are really being put under pressure and it becomes a fine line between solvency and debt. 

"Working with a DEMSA approved debt solutions provider can provide a clear path back to being in the black.”