Thu 26th Apr, 2007
Debt Management Has Come Of Age
At one time debt management was limited to cutting up your cards, having your wages garnished, or receiving a slap on the wrist from the bank as they helped the borrower sort out his finances and repay the loan.
Then the UK adopted the IVA and ‘walk away from your debt’ attitude. The problem became so severe that the government had to prevent university graduates from petitioning for bankruptcy after school so they could ‘walk away from their debts.’
The Banks, and the government, are now battling the same problem with consumers who believe the myth that an IVA company will let them walk away from 50%, 80%, and even 95% of their debt – without consequences.
Debt is starting to cause serious social and economic problems in the UK, forcing the financial community into action. Debt is not only damaging people’s ability to build wealth and repay their current loans. It is damaging their health, relationships, and family life.
Debt Help companies like Credit Action have seen unmanageable increases in the number of cases they deal with. Debtmaters receive 11,000 calls a month.
The debt management sector are now taking a pro-active stance against debt.
Debtmatters’ financial solutions expert Michael Shirley states: “We find that even when people are able to admit they have a serious problem and contact us for help, they still may not have discussed their financial situation with their partners.”
It is becoming more difficult for adults to find financial institutions that will help them hide their loan information. The government has added their own debt help lines, and educational websites, but don’t expect a simple ‘tsk tsk’ as they help you get your debt under control enough to hide the problem.
The new method of debt management is to re-educate the borrower, make them more financially savvy, and work to both eliminate their debt and prevent future debt.