Appeal over self-help debt advice
Updated on 04 November 2008
A charity has called for an overhaul of self-help debt advice which enables people struggling with their finances to sort out their problems themselves.
Citizens Advice said many people who were unable to keep up with debt repayments were able to negotiate affordable repayment plans with lenders themselves in the same way it would on their behalf.
But it said that while the negotiating process was exactly the same as if the individual was being represented by Citizens Advice or another agency, nearly 60% of people who tried to set up a repayment plan themselves had it rejected.
It added that there was a "somewhat inconsistent" approach to self-help by the advice sector, and this was not helped by the large number of self-help debt advice services that were currently on offer.
In its report, which was put out on behalf of money advice groups, Citizens Advice called for the sector to develop a consistent way of giving people initial advice, information and support to help them draw up a realistic budget.
It also wants the credit industry to change the way it processes accounts which fall into arrears and assesses offers made by customers who use self-help debt advice services.
It is recommending that a working party consisting of representatives from the credit, debt collection and advice sector should be set up to agree proposals for a self-help debt model that could be implemented by 2010.
David Harker, chief executive of Citizens Advice, said: "Personal debt in the UK is growing and it now accounts for one in every three problems dealt with by the Citizens Advice Bureaux services in England and Wales.
"As the current credit crunch and rising food and fuel costs are likely to result in more people needing help managing their finances, it's important that those who want to and are able to can negotiate with creditors directly without the risk of being treated unfavourably."
Research carried out for the group found that nearly 45% of people questioned wanted to take control of their debt problems themselves.
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