Bill problems ‘hit a million more people’

The number of households and individuals facing extreme difficulty in meeting their bills has risen significantly in the last few months.

With Britain now eight months into a double-dip recession, the latest Legal and General Moneymood Survey has revealed that during this time an extra million households have struggled to pay their bills.

And the number of homes where there is money left at the end of the month after paying bills and debts has now dropped to its lowest level since the current government took office.

The survey estimates that 3.3 million households are in danger of sinking into deep debt because they cannot afford to pay what they owe, with the average monthly shortfall being £74, equating to £244 million nationwide for the most hard-pressed homes.

For many people, simply burying their heads in the sand and hoping the problems will go away is a tempting response, but those acting this way will not tackle their issues. 

One solution may be a debt management plan or individual voluntary arrangement (IVA), which can help to spread out repayments over a longer period so they become much more manageable.

There are many examples of Cleardebt clients who have sought help and discovered there was a way out of their problems even when it seemed there could be no solution.

One example of this was a lady who had never been in trouble financially until she took out a mortgage to buy her home and then found her income had dropped. This left her borrowing just to make ends meet.

She said: "I was paying for travel and food using one of my credit cards and all three were nearly always maxed out. I was robbing Peter to pay Paul, and I felt overwhelmed and very distressed about the whole situation, suffering loss of sleep and anxiety."

But after speaking to Cleardebt, she took out an IVA to get her situation under control – and has vowed to "never live on credit again".

Another client, named John, contacted sister company Abacus after he went over his overdraft limit and suddenly found it withdrawn – all this while working overseas.

With their help, he was able to arrange a debt management plan to sort out the money he owed to creditors.

For those in trouble, there is always a solution if they seek it.

By Joe White