Browse Sections

• Education
• Special reports

CAB deals with debt burden of £2.5M to lessen locals’ worries

Ava Soe
28/10/2004

PROJECT workers in Middleton have helped lessen the worry for locals who carry nearly £2.5M of debt.

Based at Middleton Citizens Advice Bureau, Kevin Irving and Julian Stasiuk have spent the last 18 months advising on welfare benefits and negotiating repayment on financial commitments.

During this time, the dynamic duo has also helped people obtain nearly £400,000 in previously unclaimed benefits.

Bureau Manager, Julia Wilkinson, said: "Our average debt client owes £15,000 and the average benefit client is £54 a week better off. This latter figure represents money to which our clients were entitled. But they were either not claiming the benefit, or it had been withdrawn and was re-instated on appeal."

Most of the money was gained in disability and carers' benefits. Kevin's work is financed by Neighbourhood Renewal Funds, while Julian's is funded by the Legal Services Commission. Rochdale Council also funds work done by Citizen Advice workers.

But although Middleton caseworkers are pleased with their efforts so far, their battle to both help consumers and make them more financially-aware continues.

Mrs Wilkinson says one in four enquiries at the Middleton office is about debt and resources are stretched to the limit. Very often, there are so many cases needing attention that people have to be given a self-help guide, rather than the expertise of an advice worker, and the office could do with at least one more full-time adviser.

And to force more action on debt, CAB wants to have reformation details of Britain's outdated consumer credit laws included in the Queen's Speech this year.

Consumer debt includes credit card bills, store-financed purchases, car loans and personal loans. These issues account for two-thirds of the problems for which people seek advice on a national level.

Mrs Wilkinson explained: "Our present consumer credit laws date from the 70s and need changing. One of the changes we want is the introduction of more responsible checks by credit companies.

"In our experience, credit is too readily offered to people who are already having difficulty managing their finances.

"Some people in trouble often see the offer of further credit as a lifeline and don't think of the consequences. We think education in financial literacy will help to address this problem."

Mrs Wilkinson told the Guardian CA research shows there are clear links between poor mental health and debt, and that heavy-handed debt collection can make things worse.

One worried debtor told caseworkers he had been advised his debt would be registered with a credit reference agency for six years and that prospective employers would get this information. He was also asked if he had considered borrowing from family and friends to repay his debt.

The bureau manager has a word of caution for Middletonians: "Our busiest time of the year is after the Christmas credit card statements are sent out in January and February. Think carefully about spending more money than you can actually afford to repay."