The causes of debt
The main debt causes
Debt causes problems such as debt arising from disability, debt from ill health or injury or even debt from redundancy or loss of work. Through these difficult time callers can get into debt from personal or secured loans, car financing or mortgages. Many callers have mail order debt or are unable to keep up monthly payments on credit cards and loans and are being chased for late payments as a result. If this is the situation the advice can help provide accurate debt advice on unforeseen events.
Some callers suffer from shopping addiction or even have gambling debt and just need debt advice they can trust on how to avoid bankruptcy or the alternatives to bankruptcy. In many situations the public want to find out about Individual Voluntary Arrangements (IVA). Whatever the advice we can assist the public to compare debt solutions and provide advice.
Our research on the causes of debt
According to advice team the average consumer debt is £15000 approximately. The total amount of consumer credit, leaving out mortgages, stands at a staggering 150 billion pounds. That’s three times higher than when current records began just a decade ago.
The causes of debt are so many and varied and not usually due to irresponsibility, as is commonly assumed.
Most debt problems arise when people experience changes in circumstances which leave them unable to meet their commitments. This can be due to the loss of a job, a birth, ill health, a bereavement, etc. The causes of debt can be devastating to people and their families. On a practical level, clients' liberty, their home, goods and services may be lost or at risk.
The causes of debt can make people feel ashamed, guilty, frustrated, and angry and can seriously affect both their mental and physical health. It can also be the cause of a relationship breaking down amongst other things.
The causes of debt:-
- Ignoring the debt problem is one of the main causes of debt.
- Not working out a budget so forgetting about occasional items such as school expenses, Christmas etc.
- Be unrealistic about basic needs such food, fuel, clothing etc.
- Not inform your creditors that you are in difficulty. Reputable lenders will have a reasonable view if they know the circumstances.
- Not maintaining agreements with creditors, maintain it without fail. Do not ignore letters, reminders or default notices.
- Not attending court hearings.
- Borrowing more money to pay off existing debts. This increases your outgoings and just delays dealing with the problem.
- Not prioritising mortgage and rent payments. Remember that your home may be at risk if you do this.
- Divorce or marriage breakdown is a major cause of divorce.
- Debt due to bad Health
- Debt due to gambling
- Debt debt to Tax problems
- Debt due to Credit card debt
- Debt due to Store card debt
- Debt after a death in the family
- Debt from separation
- Debt from disability
- Debt from being a single parents
- Debt from mortgage shortfalls
- Debt from car financing
- Debt from secured loans
- Debt from personal loans
- Debt from Ill Health
- Debt from loss of work
- Debt due to Mail Order Debt
- Debt due to failure of a small Business.
If you have a problem with debt you can contact The UK Insolvency Helpline on 0800 074 6918. Our freephone phone money and debt advice service has been providing a confidential and non-judgemental service to the public for over 10 years.
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IVA's
The IVA Guide
Money Advice Direct has put together an IVA Guide based on the enquiries and questions that we receive at our helpline offices.
In the guide we cover such subjects as IVA Approval, early settlment of your IVA, missed IVA payments, IVA failure, additional debt claims and much more.
[click here for IVA Guide]
What is an IVA?
The IVA is an extremely powerful tool enabling you to clear your debt and return to a clean financial bill of health. Visit Money Advice Direct's Guide to Individual Voluntary Arrangements (IVAs).
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DANGER
Due to the tremendous demand for debt consolidation services the United Kingdom is now overloaded with debt management companies that contain misleading information. [more...]