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Debt: 10 warning signs and how to react
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Worried your debts could spiral out of control, as almost a third of Brits are? Find out how to detect the warning signs of dangerous debt and what you can do to deal with it now
We each owe an average of £4,570 on credit cards, plus £8,159 in other unsecured debt, such as loans or store cards, according to a survey by Unbiased.co.uk, the financial adviser directory. And these amounts are expected to rise as families resort to borrowing to fund Christmas.
More of a concern is that the number of charging orders issued by courts to secure unpaid credit card or loan debts against a debtor's home rose from 49,000 in 2005 to 97,000 last year. This year’s figures are expected to be much higher.
dealing with debt
Money worries
No wonder nearly 30% of British adults are concerned about their ability to manage their personal debt as the onset of recession piles on the financial pressure, according to MoneyExpert.com.
Yet despite the economic slowdown now hitting household finances across the country, 27% of those owing money have gone further into the red in the past three months, the financial comparison website says.
Around 4% – equivalent to nearly 1.8 million people – have increased their debts by more than 20% in just three months, according to ONS figures.
“It’s extremely worrying that so many people are concerned about managing their debts,” says Sean Gardner, director of MoneyExpert.com.
“Nothing’s so stark as a reminder that many of us are struggling to repay the money we owe.”
Credit card promotions arriving in the post, 100% and even 125% mortgages being readily available until a year ago, as well as student loans, have left many of us adrift in a sea of debt.
But how can you tell if you’re starting to sink or managing to stay afloat despite using bank overdrafts and credit cards to get by each month?
Find out with our Top 10 debt warning signs that show you could be getting in over your head.
by Martin Pegan, 11 December 2008
