Debt crisis warning

THE number of Wiganers struggling to make ends meet and facing bankruptcy is growing at an alarming rate.

Shocking new figures from the borough’s Citizens Advice Bureaux show that the average amount owed by locals seeking help has rocketed in the space of just 12 months, from £3,937 to £6,347.

The CAB’s Wigan boss today said he was very concerned about the speed and scale of rise, grimly adding that he expected it to get worse with no obvious end in sight.

Soaring food and fuel prices, coupled with wage freezes or cuts lie at the heart of Wigan’s troubles, but the bureaux’s district manager, Chris Harris, says that when benefit axing starts to take effect then personal debt problems locally are bound to deteriorate further.

As was reported earlier this year, in 2009, Wigan’s Citizens Advice Bureaux helped 77 people owing a total of £3.1m through bankruptcy. Last year that number had shot up to 203, who owed a staggering £4.5m, and the volunteers dealt with many other inquiries about bankruptcy besides.

The Consumer Credit Counselling Service has now issued its own figures, saying that Wigan residents contacting it for help in 2010 owed an average of £17,619 in unsecured debts while the number of people contacting the CCCS helpline from the Wigan area rose by 44 per cent in just two years, to 675.

Mr Harris said that the CCCS will be helping more middle income clients who will have run up debts on credit cards, whereas CAB tends more to help those on lower incomes with priority debts such as utility and council tax bill arrears.

He also points out that Wiganers’ unsecured debts may be £2,000 lower than the national average, but with locals earning substantially less than the UK mean, they are actually worse off than most.

He added: “I am very concerned about these rises. The figures for our clients are very high and people are finding it more and more difficult to make ends meet.

“People are having to borrow for essential items and paying normal bills. Rising fuel and food prices are big problem.

“A lot of people are dependent on cars to get to work. And when the Department for Work and Pensions expects you to drive a long way for a job – even as far as Birmingham, otherwise you are ineligible for benefits – then petrol is a priority.

“I do expect this debt figure to rise further. A lot of people are going to have benefits cut and there is the prospect of unemployment rising, so things are going to get progressively more difficult for people.

“I don’t really see an end to this either, if you think about the position the country is in economically.”

Delroy Corinaldi, external affairs director at CCCS, said: “While debt levels in Wigan are below the UK average, the continuing squeeze on household budgets is making it increasingly difficult for many debtors to repay what they owe – and I remain concerned about the personal debt situation in the area.

“I would urge anyone in Wigan who is worried about how to deal with their debts to seek free advice from a charity such as CCCS as early as possible.”

Mr Harris said that compared to some people running up debts on their credit cards, £17,000-plus was not massive.

But he added: “One of the problems at the moment is that a lot of people borrow to keep themselves going on a day-to-day basis. So they are borrowing to pay the mortgage, for instance.”