Dire debt crisis is looming

9:55am Thursday 7th December 2006

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ROCKETING personal debt in Crewe and Nantwich has sparked dire warnings from counsellors in the run up to Christmas.

Manager of Crewe and Nantwich Citizens Advice Bureau Paul Nicholls warned people that they could lose their homes if they allow debt to spiral out of control.

He described how the number of debt enquiries in South Cheshire has soared this year, with hundreds of people in the borough experiencing financial worries.

He said: "Helping people with their debts has always been an important aspect of CAB work, but the demand has definitely increased during the last year.

"The number of debt enquiries at our Crewe and Nantwich offices during the period April to October was 42 per cent up on the same period last year.

"Personal loans and credit cards continue to be the most common types of debt, but we have also noticed a significant increase in the number of clients struggling with secured loans.

"People with money problems are tempted to consolidate their debts in a single loan, secured to their home. Unfortunately, this can later place them at risk of losing that home.

"There are other solutions, and we would urge people to take advice before committing themselves to a loan that brings with it the risk of homelessness."

South Cheshire MP Stephen O'Brien this week gave his backing to a new campaign to tackle the soaring levels of personal debt.

Nationally, consumer debt has now hit £1.2 trillion, bankruptcies and insolvencies are soaring and there are now more credit cards than people in the UK.

Mr O'Brien said: "An increasing number of people are getting into financial difficulties as their debts soar, causing themselves and their families great distress.

"The recent interest rate rises, which have increased mortgage costs - coupled with rising unemployment, energy bills and taxes mean that household budgets are under massive pressure.

"The number of personal bankruptcies is soaring, as is the number of people asking the Citizens Advice Bureaux and other debt counselling services, for help with their debt problems.

"Tackling personal debt and financial exclusion is an issue of social responsibility.

"We need to take practical steps to help people avoid falling into the debt trap in the first place."