Tuesday, 25 November 2008

Sefton CAB and debt

I noticed this article and thought that it fits in with concerns many of us have been having especially over social housing and the painfully slow reponse from governement.

'Citizens Advice Sefton has seen a sharp increase in the number of people seeking help for problems of poverty, housing insecurity and debt.

Over the six months from April to September 2008, 4,034 people asked Citizen’s Advice Sefton for help with 10,960 problems. 64% of these problems were concerned with just two of the sixteen categories of problem the CAB can help with: debt and welfare benefits. There has been a discernable increase in the number of people seeking help to deal with creditors seeking charging orders, statutory demands and orders for sale. Charging orders for debts of over £5,000 put people at real risk of homelessness as these debts accrue 8% statutory interest which eats away at equity in the home at the same time that property values are falling.
Pauline Killen, Chief Executive of Sefton Citizens Advice, says: “In the present economic climate we have noted that there is a worrying trend for creditors to try to obtain a County Court Judgment swiftly followed by a Charging Order. In some circumstances a Charging Order can carry contractual interest, for example if interest runs on the underlying judgment. This can result in a relatively low debt mounting up with the Charging Order and spiralling to a large debt. Once a Charging Order has been obtained, the creditor can ask for an Order for Sale and repossess the home. Our experience shows that most people do not realise that unsecured credit, if unpaid, can be converted through the courts to secured credit, ultimately putting their homes at risk. It is essential to get advice regarding debt at an early stage, so that court action can be averted or subsequently defended.”

In the past six months, Citizens Advice Sefton has noted a 33% increase in problems related to rent arrears with housing associations and a 77% increase in problems related to rent arrears with private landlords. There has been an 87% rise in advice related to County Court and High Court proceedings, and a 50% increase in problems with mortgages and secured loans. Bankruptcy applications dealt with by the Citizens Advice Legal Help Unit have increased by 63% over the past 12 months. The unit has also seen the level of housing debt increase by 87% and the level of priority debt increase by 50%.

Enquiries about separation and divorce increased by 85% over the same six month period. It is perhaps worth considering how many of these enquiries are related to the stresses caused by the problems of housing insecurity, poverty and debt.

To speak to Citizens Advice Sefton, telephone (0151) 928 2029 or visit http://www.seftoncab.org.uk/

article from Sefton CVS Bulletin