Soaring rate of bad debts
PUBLISHED: 15:44 02 November 2007 | UPDATED: 08:54 21 July 2010
MORE people in the borough are finding themselves with debts they can t repay due to easier access to credit cards and loans and small businesses going bust...
MORE people in the borough are finding themselves with debts they can't repay due to easier access to credit cards and loans and small businesses going bust.
Richard Tchoutezo, manager at the Citizens' Advice Bureau in Mare Street, Hackney, says he is now getting an average of 250 people through the doors every week.
He said: "We had to change the system to accommodate the number of people. Before June, we were getting about 80 people a week. That tells you about the situation.
"It can be because they've increased the size of their family, have had a family bereavement, or wanted to get a car, but find out it is eating into their monthly income and cannot afford the payments." More worrying is the rising number people with small businesses who, Mr Tchoutezo says, are coming t to the bureau for help.
He added: "There has been an increase in clients starting up small businesses, borrowing money from the bank and three or four years down the line they have nothing left and want to go into bankruptcy."
A spokeswoman for Hackney Credit Union added: "We have seen an increase in the number of members joining and taking out loans. There has been a significant increase in debt in the borough."
In the last 12 months, the Mare Street-based credit union has received requests for loans totalling more than £500,000 and forked out £125,000 to help people pay off debts, particularly to doorstep sellers.
Their experiences are backed up by research by credit reference agency, Callcredit, that found east London residents had the highest amount of debt anywhere in the UK.
Mark Ward, head of consumer services, said: "It is mainly to do with credit cards and loans. We need to take control of it, particularly in the big conurbations.
"With the lending of money over the long term, you end up paying three or four times more back in interest. When doing the research, we were surprised by how many people don't know how much they owe.
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