Unfortunately, debt is now part of most people’s everyday life, so much so that it is practically another family member. Families have credit cards or mortgages and loans, using them and adding them to everyday regular financial usage. Low interest rates and increasing home values have made people feel wealthier, therefore feeling able to take on more debts. Britain’s personal debt has increased to 50% in the past five years, and now tallies at a record £158 billion. The average adult owes approximately £3,400 excluding mortgages. This has left the Treasury and The Bank of England harbouring concerns.

Many households now have two incomes and even longer working hours, leaving the illusion that families are cash rich. However, the financial balance between income from salaries and wages to all the outgoings is very vulnerable. For some people, being in debt is a way of life and with careful handling can keep the creditors at bay. The media has made credit so easy, as it is constantly advertised on the T.V, tempting offers are in newspaper and easy loans are posted through post boxes every day. It does not stop there, for students who choose to further their education are too left in debt after using student loans to fund their degree. Students who graduated last year owed an average of £10,997. This is made worse, when mirrored by the fact that homes in the South East sold at £15,000.

The boundary between overspending and risky debt is very easy to cross. The economic slowdown has had a knock on effect on share prices and the city. This extends to loss of jobs for city traders, and could also affect the travel and leisure industries. With the public feeling unsure about current circumstances, this affects consumer spending, again harming over time and jobs. A drop in the income ocean and an increase in interest rates would mean that for many families, this delicate financial boundary will not last much longer, leading to further problems with debt, a drastic reduction in spending and a change in lifestyle.

Although many families can handle to balance of income, outgoings and debt, situations that cannot be controlled, can easily disrupt this order. Unexpected redundancy and job loss, a death in the family, separation or illness can have a massive effect on finances. Therefore managing debts soon become unmanageable and stressful.

The Citizens Advice Bureau (CAB) see many people in this situation. Many clients are worried about handling bills of £100, whilst other clients have to deal with thousands of pounds. They even come across people who should not have been allowed to receive credit in the first place. Sadly, the CAB’s current report shows that the debt problem is not going away, but instead rising.

Therefore, what support is there when debt does start to cripple the family? There are debt management companies who advertise their services in negotiating repayments with creditors, but they should be approached with care, as they charge fees of 15% to 25% of the debt. Sources of help are available at local CABs, where they offer free and confidential advice and help.