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Economic slump reinforces importance of debt advice

04/02/2009

During a downturn, carrying debts can be more dangerous than ever – as the Government’s current focus on the importance of debt advice clearly illustrates.

And in general, the deeper the downturn, the more important it is for people with financial problems to seek debt advice. Published on January 13th, the Fourth Quarter (Q4) Economic Survey from the British Chambers of Commerce (BCC) provides clear proof that today’s economic problems are far-reaching indeed.

To quote from the BCC site, the Survey’s key findings include:

• The manufacturing sector’s balances for home sales and orders, employment expectations, investment, confidence, and cash-flow have plunged to record lows in Q4
• In the service sector, all the key balances, without exception, are at record lows in Q4
• Q4 domestic balances are particularly disturbing. Home sales and orders, in both manufacturing and services, are in negative territory for all firm sizes and for all UK regions

What can debt advice achieve?
So where exactly does debt advice come in? If someone’s income seems threatened by the nation’s economic problems, how can debt advice help them prepare for the possibility of reduced income?

“Coping with a reduced income is never easy,” said a debt expert for Debt Advisers Direct, “but entering a period of unemployment with substantial debts can be particularly difficult, as this can drastically affect a borrower’s debt-to-income ratio. This is why we stress the importance of seeking debt advice at the earliest sign of possible trouble, whether it’s the threat of growing debt or the threat of redundancy.

“A professional debt adviser can help borrowers analyse their situation, set themselves goals and figure out the best way of achieving those goals. For some people, it may just be a question of cutting back on their expenses, while others may need to look into professional debt solutions – but either way, the sooner they get some debt advice, the easier they should find it to get their debts under control.”

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