THE total figure this year for debt in Cheadle and the surrounding district has reached £7.9million - but it is still lower than previous years’.
Cheadle Citizens Advice Bureau (CAB) is working with clients from across Cheadle and the district who are struggling with debt to try and bring down this year’s total figure of £7,924,926.61.
Since January to December 2013 the bureau has helped 341 people with debt problems.
Debt figures are spilt into four categories, the first is Priority Debt, which puts people’s homes, property and liberty at risk, such as council tax, mortgage, rent, gas and electricity bills and magistrates’ court fines.
The second is Non-priority Debt, such as unsecured, personal loans, payday loans, catalogues, store cards, credit cards, overdrafts, phone contracts, County Court Judgements, and County Court Action.
The third is Secured Debt, which includes second mortgages, log book loans, mortgages, re-mortgages and secured loans.
Of the total figure £895,102.18 is Priority Debts, £3,151,535.84 is Non-priority Debt, and 3,878,288.59 is Secured Debt.
In comparison this year’s figure is a reduction on previous years’; in 2012/2013 the figure was £9,509,235; in 2011/2012 the figure was £8,608,601; in 2010/2011 the figure was £14,176,964; in 2009/2010 the figure was £14,185,404; in 2008/2009 the figure was £13,151,646; and in 2007/2008 the figure was £10,484,390.
A spokesman said: “The total relates to the debt figures being handled by Cheadle Advisers, but are not just for people in Cheadle and the district, we also work with clients from Leek and Biddulph.
“Cheadle has a project called Face 2 Face Money Advice, with an adviser who offers specialist debt advice, alongside the other CAB advisers.
“This year’s figures are not the highest we’ve had, it hasn’t really been a lot different than any other year, so they are typical figures and what we’re used to dealing with.
“It looks as though it has reduced in the past year from the past five years, but four years ago we lost the legal aid which enabled us to help more people, and could be why it seemed higher.”
But, the spokesman warned that although the debt figures appear at their lowest now, if interest rates, in particular mortgages rates, start to go up people who are only just managing at the moment will suddenly be at risk of repossession.
She added: “It’s not worth banks repossessing homes while interest rates are so low and people who are on the edge but managing now will be pushed too far.
“We have started having more people inquire about Foodbanks and have increased our referrals to Leek.”
Currently the busiest times of the year for debt problems are between February and July when people have Christmas and holiday bills to pay and credit card debt, and seasonal jobs over Christmas have ended.
From May to July advisers say they tend to get a lot of council tax Liability Orders issued, so up until about August they mostly deal with clients with council tax arrears.
To help with debt problems, advisers negotiate with creditors on clients’ behalf, check that they are getting all the benefits they are entitled to, and look at other debt solutions such as Debt Relief Orders or Bankruptcy.
The spokesman added: “We urge anyone in debt to seek advice as soon as they have problems, before they take any action.
“A lot of people can’t see the wood for the trees and sometimes take action that’s not good for them because they are panicked, frightened, pressured and intimidated and often agree to do something they can’t really do.
“They just need someone independent to sit them down and say ‘this is what you should do’.
“Creditors and businesses will listen to us as intermediaries and we can help to arrange affordable and realistic payments.
“We have dealt with many clients who have done something themselves in a bid to resolve debt issues, such as re-mortgaging their properties or getting consolidation loans, and it wasn’t necessarily the best thing to do, whereas if they had come to us earlier we’d have taken a different course.
“A lot of people get in debt and we make them think more about what they’re spending and where their money is going.
“When we set up budgets with people it includes everything that they spend throughout the year, laid out as a monthly amount.
“One of the reasons people take payday loans is because they’ve spent everything they’ve got in that month, because they haven’t forward planned or budgeted.
“Our advice is to save money for everything you pay for every month, even if certain things only come up at certain times a year, and then nothing is a big shock and the money is there.
“It’s just about being realistic about spending and saving.”
The CAB is well placed to offer financial advice, as an organisation that is often under financial pressure itself.
Face 2 Face Debt Advice has only got funding until October and the advisers say they are unsure of what will happen after that.
The spokesman said: “We are always under financial strain as it’s difficult getting funding and we never know from contract to contract whether we’ll get funding.”