By Jacklin Kwan
A MARKED decrease in the number of people seeking debt counselling is a cause for worry, says the Oldham and Saddleworth branch of Christians Against Poverty (CAP).
The debt management charity is urging people to seek potentially life-changing financial aid after seeing a drop in the number of individuals seeking help, even though the ongoing pandemic has affected thousands across the country.
The fear is that those struggling with debt are suffering in silence rather than taking proactive action to prepare for insolvency or to plan repayments.
Eike Harvey, 55, the Centre Manager for the Oldham and Saddleworth branch who has worked with CAP for eight years, said individuals only seem to come forward for help right as their lives began to fall.
She said: “They wait and wait until the pressure from the creditors gets too much.
“At that point, people panic if they get a letter that says an enforcement agent is going to come, or if they get a letter saying they’re going to be taken to court for potential eviction.”
She believes Covid-19 temporarily alleviated these pressures as enforcement agents knocking on doors to make house visits and evictions was temporarily banned until the end of September – but the underlying debt is slowly growing.
Mrs Harvey continued: “People who have perhaps lost jobs will sit at their desk thinking, ‘Hopefully, a better day is going to come where I’ll be able to sort myself out’.”
Government financial support such as Universal Credit, furlough or the Self-Employment Income Support Scheme, may be insufficient to prevent debt from spiraling, the debt counsellor stated – leading to a sudden collapse of a household’s finances and individual’s mental health.
Mrs Harvey added that debt can cause people to hide away from the world with curtains drawn – a tendency made more tempting by Covid-19 restrictions.
“Don’t sit on your debt,” Mrs Harvey urged. “This is the best time to address it.”
She added the vast majority of her clients struggle with low self-esteem, anxiety, depression and thoughts of suicide, even though the causes of debt were often associated with uncontrollable circumstances like unemployment or sudden illness.
“More often than not, people feel they’re responsible. There is a lot of shame attached to having to admit that you’re struggling,” she said.
Such experiences have been encountered by bodyshop controller Gary Croad. After separating from the mother of his children five years ago, Mr Croad came away carrying their household’s debt.
The costs of setting up a new home and providing for his children created substantial credit card bills, which snowballed until payments going out were greater than his income.
Mr Croad, 52, remembers: “I got quite depressed. I went through quite a suicidal period where the train of thought tended to be that the only value to my children would be the life insurance I had.”
He spent months looking at his bank statements, attempting to save money but realising there was nothing else to cut back on. Meals slowly just became beans on toast.
“Within that situation, to have two young children, thinking about what you want to provide for them… The only way I could see this situation was me as a failure,” Mr Croad said.
He attempted to work with a private debt management company and would pay £80 a month, but the company would take a 50 per cent cut. It was only when a friend mentioned CAP to Mr Croad that a light appeared at the end of the tunnel.
His monthly payments starting going towards repaying his debts or into savings, and the charity often arranged events or support networks to help him cope with the journey.
“They’re aware of your situation, so at Christmas they always bring your own hamper,” he said.
“They organised events, little comedy evenings – there was always something going on where you could mix with other people in the same situation.”
Mr Croad no longer lives with debt and believes that working with CAP has helped increase his ability to budget and save for the future.
CAP assists indebted households to gather information about their financial status and create a personalised budget and debt repayment program. They may also help correspond with creditors to negotiate repayment terms and conditions.
In more severe cases, CAP also helps client prepare for insolvency.
Find out more about CAP and how they can help you by visiting their website: https://capuk.org