Struggling debtors: over forty percent risk snowballing debts
Research commissioned by R3, the insolvency trade body, reveals that more than four in ten (44%) individuals who freely admit to struggling with their debt have not sought advice because they do not believe that their problem is big enough to need help.
R3 President, Steven Law commented:
“It is worrying that individuals are not seeking professional advice at the first signs of financial difficulty because they don’t think their problems are severe enough. While it may be the case that these problems are resolved without help, there is a risk that they might snowball out of control. Professional advice does not mean immediate bankruptcy. It could simply result in advice on budgeting.”
R3 estimates that nearly 1 million people struggling with debt have not sought help, and the research found that close to ten percent (9%) of individuals were reluctant to seek advice because they were afraid of being made bankrupt.
The findings show that the stigma of admitting to debt problems remains as more than one in ten (14%) have not sought help because they are worried about what people would think, with eleven percent concerned about the effect it will have on their families.
Steven Law continued:
“It would seem that many of the individuals who need financial advice are burying their head in the sand. Unfortunately, refusing to acknowledge your financial troubles won’t make them disappear. The sad thing is, the longer someone takes to get help the fewer options will be available to them. If individuals leave it too late to seek help, bankruptcy may be their only choice.
“If someone seeks help early they will be able to take stock of their finances and will be on their way to attaining peace of mind. They may also avoid going into a formal insolvency procedure.”
Methodology note: Commissioned by R3, research agency ComRes surveyed 1,961 members of the public who describe themselves as struggling with debt by online questionnaire, between 17 December 2009 and 7 January 2010. The sample is split into five sections, one of which is the 1,193 individuals who are struggling with their debts, but haven’t contacted anyone for help.
R3 Press Office