Government plans to ease debt ‘may hinder many’

Government-backed plans to help people in debt have been criticised by two industry bodies.

Debt solution provider Cleardebt and Debt Resolution Fo…

Government-backed plans to help people in debt have been criticised by two industry bodies.

Debt solution provider Cleardebt and Debt Resolution Forum have both stated that the scheme fails to meet the needs of those with significant financial worries.

The proposals have been drawn up by the British Bankers Association, Consumer Credit Counselling Service and Citizens Advice and aim to provide a narrow window – in which people only need to repay the minimum amount they can muster – to those who cannot afford to pay back what they owe.

David Mond, chief executive officer at Cleardebt, said that the arrangements would be beneficial to few and problematic for many.

He commented: “The fact is that most struggling debtors don’t have short-term debt problems … they’ve been failing to cope for years and a six-month window will do nothing to help.”

Last week, figures released by uSwitch.com showed that high energy bills caused by the cold weather this winter had put 5.5 million individuals into debt with their suppliers.

By Joe Shervin

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