Press Release
Only Santa should be in the red this Christmas
Monday 11 December 2006
Christmas could break the bank for the more than 6.6 million people already behind on payments, the Legal Services Commission (LSC) warned today launching its Christmas debt awareness campaign.
The campaign asks shoppers to think of the debt they may be racking up ahead of January when the bills arrive. The LSC pays for legal aid, including debt advice, and last year calls for debt help to the Community Legal Service Direct phone line in January doubled the calls logged for December.
In 2006 debt became a more serious problem in the UK than ever as households struggled to cope with debt totalling £1.1trillion, thats more than £16,500 worth of debt for every man, woman and child in the UK.
- 6.6 million people reported being three months or more behind with payments on their regular commitments
- individuals declaring themselves insolvent have risen 95%
- bankruptcies are up by nearly a third
- home possession orders have jumped 66% and repossessions 47%
- the average personal debt of visitors to advice agencies has topped £30,000.
To get the debt message out in communities across England and Wales LSC staff have volunteered to hang Christmas debt prevention posters entitled, Only Santa should be in the red this Christmas in around 5,000 locations such as pubs, church halls, Christmas markets and job centres.
Caroyln Regan, Chief Executive of the Legal Services Commission said:
"It's difficult to avoid expense at this time of year but tackling debt problems early is the key to staying afloat. Keep track of your spending, know how much you owe and if you are in trouble call for help now.
"Getting help now can help you avoid bailiffs, eviction and disconnection from utilities in January. Fifty percent of households with serious debt problems have an annual income of less than £7,500.
"That means Christmas debt can mean a choice between not eating or having the power cut off when January bills arrive."
Pensioner, Arthur Finch (not his real name) couldn't afford to eat when his creditors pushed for higher monthly payments on his debts worth more than £30,000. He was threatened with a bailiff's visit when he told two of his creditors there was no way he could increase payments. He lives in sheltered accommodation and has no assets.
After getting free civil legal aid from the Legal Services Commission, Arthur* is back on top of his finances.
"I never should have been offered so much credit. I cant afford it. I took the loans the bank offered me because Christmas is an expensive time.
"When I finally called an adviser I was actually frightened and upset. My creditors were pushing me for higher and higher payments, sending threatening letters - and on my pension there was no way I couldnt afford it. Id already sent them my electricity money.
"I would recommend my adviser to anyone. She talked to everyone I owed money to and my bills came down to a fair level."
Tips for a debt free Christmas
- Using credit or catalogues can be a good way of spreading the cost of Christmas but you dont want to be paying for this Christmas this time next year. Don't take on more repayments than you can afford in full within the next few months.
- Don't be tempted to keep buying more, set a budget and stick to it.
- Gas prices have gone up this year so make sure you budget accordingly. If you are on benefits or over 60 you may be eligible for help with your fuel bill. You might also be able to get a grant to help pay for heating and insulation improvements.
- Make sure you know the penalties you might incur if you fail to pay your credit card bill. You could consider switching your balance to a 0% interest deal.
- If you are having problems paying, let creditors know. They may be able to extend the time you have to pay.
- If you find yourself in debt problems get advice. Don't let the bills mount up unopened. The earlier you get help, the easier and less stressful it will be.
The LSC is encouraging people to access the help they need if they do find themselves with debt problems.
Community Legal Service Direct (call 0845 345 4 345) can direct people to the best source of information and advice, including a network of local debt advice services.
Callers living on a low income or benefits can speak to one of our specialist telephone debt advisers. They can negotiate with creditors, check a client's financial situation and draw up a programme of reduced payments.
-ENDS-
For more information or to arrange interviews please contact:
Michaela Keating (tel: 020-7759-0444)
Daniel Kellingley (tel: 020-7759-0415)
Notes to Editors
- Various case studies of people who have received help to tackle debt problems are available upon request.
- The CLS Direct helpline dealt with 73,000 problems last year. Nearly 30,000 of the calls related to debt.
- The Only Santa should be in the red this Christmas posters are available in pdf. format as an image.
- To find out if you qualify for legal aid, find local legal advice services or download a debt information leaflet please visit the Community Legal Service Direct website.
- Source for debt facts and figures:
http://www.fsa.gov.uk/pubs/plan/financial_risk_outlook_2006.pdf
http://www.socialexclusionunit.gov.uk/downloaddoc.asp?id=200
Last updated: 28 December 2006