For someone with debt problems, admitting those problems exist is normally seen as ‘the first step’. Once they’ve done that, they can talk to a professional and find out about the best way of getting out of debt.
Many of them will be quite surprised to find out there’s more than one possible solution. A recent report by R3 (the insolvency trade body) found that a lot of people with debt problems don’t even know that bankruptcy’s not the only kind of debt help that’s there for people with debt problems. In fact, some of them had never even heard of bankruptcy!
20% of the struggling borrowers who were questioned had never heard of bankruptcy.
And when it comes to the other kinds of debt help, even more people didn’t know about them.
Only 51% had heard of IVAs (Individual Voluntary Arrangements). Only 41% had heard of debt management plans. And only 14% had ever heard of DROs – Debt Relief Orders, a new kind of insolvency that only came into existence last April.
The people in question actually had all kinds of reasons for not getting debt help.
44% of them said they didn’t think the problem was big enough to need help – even though they’d admitted that they were struggling with their debts.
25% hadn’t got any debt help because they saw their problems as short term.
21% said they didn’t know where to go to get debt help.
21% said it was just easier not thinking about it.
20% said they couldn’t afford help or advice – even though debt advice is available for free from many different organisations.
14% were worried about what other people would think.
11% didn’t trust anyone to help.
11% were scared about the effect it would have on their family.
And 9% were afraid of being made bankrupt.
It all highlights the importance of talking to an expert who can listen to their problems and explain what kinds of debt help might be appropriate for them.
