According to research, debtors in an informal management plan could only afford to pay 26 per cent of their contractual payments. By the time consumers sought advice, unsecured debts equalled 113 per cent of their gross yearly income, which Chiltern suggested would take more than 12 years to repay at an affordable level.
People who had four or more credit commitments and those who used credit to pay for daily necessities were also at risk. The statistics claimed that the average age of those seeking help was 43, and indicated that women were more likely to take up advice.
Joanne Gill, head of marketing at Chiltern Debt Management, said: “Creditors are generally seen as the bad guys when a person cannot afford their debts. But our experience is that they treat customers with genuine difficulties sympathetically and recognise that by engaging an informal debt management service the debtor wants to repay their debt.”
Nick Du Boulay, director of the Debt Advice Portal, said: “Debt is a result of two things – the lender and the client and it is down to both. Many have taken out consolidation loans and ended up back in debt, so it’s a case of people changing the way they live.”
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