Wednesday 10th of June 2009
Lenders have been urged to work with borrowers in order to help those who are struggling to repay what they owe.
Citizens Advice made the call after finding that debt problems increased by 11 per cent in the 2008-09 financial year.
An individual voluntary arrangement (IVA) is one way that a consumer can reduce what they owe, with creditors agreeing to smaller repayments over a period of five years.
And David Harker, chief executive of Citizens Advice, predicted that more people will need help as the recession continues.
"It is therefore absolutely vital that all lenders and creditors treat people in arrears fairly and sympathetically, negotiate with borrowers in trouble and do everything they can to help ease their debt problems," he said.
Enquiries about debt in the first three months of 2009 were up 21 per cent compared to last year, while those about redundancy increased by 179 per cent.
Recent statistics from charity Credit Action indicated that one person is entering into an IVA or being declared bankrupt every 4.35 minutes.
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