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Consumers 'Denying Responsibility For Debt'

Nov 7, 2007
As many as three-quarters of consumers feel that they are not responsible for their level of debt, new figures suggest.

Research published today by personal finance commentator Callcredit has indicated that almost 75 per cent of consumers blame others for their over-indebtedness. The firm has stated that, with recent Bank of England figures revealing a rise in the level of consumer debt by 1.35 billion pounds in only the last month, increasing numbers may be losing control of their borrowing. A refusal to acknowledge their culpability suggests a further worrying trend, with those denying their debt perhaps less likely to seek out help such as debt consolidation loans.

The figures varied across different regions of the UK, with the most pragmatic being those north of the border - only 62 per cent of consumers in Scotland felt that they were not responsible for their level of debt. By comparison, 72 per cent of borrowers in the south-east feel that the blame for their borrowing lies elsewhere. Owen Roberts, head of Callcredit Consumer, comments: "It is important to remember that responsible lending goes hand in hand with responsible borrowing. Consumers need to look closely at their own borrowing habits and take control of their finances. Instead of worrying about who is to blame, as individuals we need take responsibility for our own financial wellbeing. My advice to people who feel that they are struggling with repayment commitments is to assess their debts by checking their credit report - they should then contact their lenders to discuss a suitable repayment plan."

The credit reference agency has three major items of advice that it recommends to those who may be struggling to service their borrowing. Firstly, it states that taking control of a financial situation relies on gaining a clear idea of the monetary position - for instance by getting a copy of the consumer's credit report. This facilitates a better understanding of how much is owed and current creditworthiness. Consumers are also recommended to seek out advice, such as through the Consumer Credit Counselling Service, which can provide valuable assistance in mapping out a plan for future budgeting and repayments - such as combining current borrowing into debt consolidation loans. Furthermore, the firm recommends drawing up a budget and sticking to it before looking to take on further credit, to avoid increasing current borrowing.

Earlier this year, the ifs School of Finance established that as many as 80 per cent of the UK population regularly overspend, stretching those budgets which are already under strain from rising inflation and the increased cost of living. The school established that five per cent have considered taking out an individual voluntary arrangement or declaring bankruptcy, while almost one in ten (nine per cent) have taken out a credit card in order to pay off another credit card, rather than considering the benefits of cheap loans.

While consumers in Scotland may be more honest about responsibility for their debt problem, they may be equally at risk of finding themselves in financial difficulty. Recent comment from Citizens Advice indicated a rapid increase in the number of people seeking help in managing their finances in the country.
About the Author
Tom Dawson writes for Essentially Home Loans. Our visitors can apply for secured loans online, for whatever reason with whatever credit history. Visit us today for the best rate loans available.
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