10 October 2008 / by Rachael Stiles
An increasing number of people are seeking advice on how to deal with arrears on mortgage payments, fuel bills and secured loan debt, according to figures from the Citizens Advice Bureau.
During the last 12 months, Citizens Advice has seen 77,324 more people approaching them for advice on mortgage and secured loan arrears problems, a 35 per cent rise compared to the previous year.
In the second quarter of 2008 alone, it has noticed a 51 per cent increase in new mortgage enquiries about mortgage and loan arrears, and a 10 per cent rise in fuel debt enquiries, compared to the same period in 2007.
The charity urges people in this situation, who are struggling to keep up with mortgage and loan repayments and household bills, to seek help from their lender or energy provider – they should approach the company and explain the situation.
As more people are approaching Citizens Advice, it says that getting help from such an organisation can help when trying to come to a suitable repayment agreement with lenders, fuel companies and mortgage providers.
However, it also added that it is vital for lenders and gas and electricity providers to “show forbearance, treat people in difficulty fairly and do everything they should to help people stay in their home or manage arrears.”
While credit, store card, charge card and unsecured loan debts still account for the largest proportion of problems that the bureaux are approached about, 35 per cent of all enquiries, the Citizens Advice Service was pleased to find that such enquiries were down four per cent on last year.
Mortgage arrears and secured loans have now taken a five per cent share of the debt problems that are handled by the bureaux, while fuel debt accounts for four per cent of problems.
The CAB’s figures revealed that its clients experiencing mortgage and secured debt problems are largely made up of groups which are vulnerable to rises in mortgage rates and the cost of gas and electricity, such as single parents, the disabled, or those with long term health problems.
Of clients who were seeking advice from the Citizens Advice Bureau in June and July this year, clients struggling to keep up with secured loan and mortgage repayments had been in arrears for an average of four months, with the most common reasons for not being able to pay cited as job loss, failure of a business, ill health, or the breakdown of a relationship.
“These figures show how the current economic situation is hitting vulnerable and low income households the hardest.” said Citizens Advice chief Executive, David Harker.
“To prevent this situation worsening, it is vital that mortgage lenders and fuel companies do everything in their power to help people in arrears to come to a workable solution over repayment arrangements, rather than piling on extra charges. All creditors should treat borrowers in arrears fairly and sympathetically, negotiate with borrowers in trouble and only use court action for mortgage arrears as a last resort.
Mr Harker urges any householder worried about debt to seek advice immediately, and to get help from the CAB or other free independent advice agency, which can help them to work out payment options and ensure they are receiving all the benefits they are entitled to.
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