Friday, May 30, 2008

Affluent borrowers now struggling with loans and debts

According to a recent report there has been a turnaround in the type of consumer contacting debt charities and agencies, with more affluent people now contacting these agencies in order to get help with their loans and debts. The global credit crunch has resulted in a huge surge in the number of middle class homeowners who are now struggling with their debts, and are therefore contacting debt advisors for assistance.

According to one debt charity, Transact, the number of people seeking debt related advice in some affluent areas has risen by around 100%, whereas the rises in lower class areas has not been anywhere near as high. In the past most of the people seeking this sort of advice have been unemployed or low income people in less affluent areas, but now it seems that even the fairly well off cannot escape the problems that the credit cards crunch has brought with it.

One official from the debt charity said: "In the past it was almost uniquely people on benefits, people in social housing who went to debt advice agencies. Since the credit crunch started, they are seeing a big increase in professional people and homeowners coming to seek help, who have just been pushed over the edge and now can't cope with their outgoings. These services now with the credit crunch are being overwhelmed by a whole new breed of debtor: middle-class people. But what that means is there is much less debt advice to go round."

One advisor working in an affluent area said: "We've seen probably almost a 100% increase in clients. This time last year we were really quite quiet." She added: "I've had at least two clients sit in front of me and tell me they would have killed themselves if they hadn't found out we were here."

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