Debt charity Citizens Advice has today sounded a warning, as they estimate that UK households owe £18.9 billion in arrears to essential service providers and their local council. This household debt has now overtaken consumer credit as the key problem for which people seek out the debt charity.
The essential bill debt includes almost £7.5 billion in tax credit overpayments that have yet to be paid back, £2.84 billion in council tax arrears and £2.2 billion owed to water companies. The total furthermore marks a rise of 40% compared to the £13.5 billion that was owed in 2011-12.
As a result, the charity helped with 690,000 bill debt problems last year, almost double the number of consumer credit issues they saw (350,000). As these troubles can lead to much more severe consequences than credit debt, with missed council tax payments potentially even resulting in a prison sentence in some extreme cases, it's not surprising that more people are seeking help. At the same time, it's worrying that so many fall behind.
Citizens Advice reported that many of the people that come to them are afraid of bailiffs, with chief executive Gillian Guy reporting: "One person every three minutes comes to us for help with bailiff issues … small missed bills can skyrocket through excessive enforcement fees. Our evidence shows aggressive tactics by bailiffs cause huge distress and can even push people further into debt."
If you know someone who's struggling, the taboo that stops some people from talking about money matters may prevent you from offering help directly, but you could suggest they seek out their nearest debt charity for advice. If they don't want to do even that, or the debt is still manageable enough – and their credit rating is still positive – there's also the loans pages to consider for direct action and our debt guides for those not sure what steps to take.
Gillian pointed out that "Families are going without essentials like food or electricity to meet their payments." This kind of debt won't go away by simply ignoring it, and nobody wants to see bailiffs come around, so anyone struggling with paying the bills should strongly consider seeking help before it's too late.
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