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Bad credit loans to rise as consumer debt reaches crisis levels

The number of people struggling with consumer debt is reaching “crisis” levels, the Citizens Advice Bureau (CAB) has warned, meaning more people could need bad credit loans.Its research found that up to 6.5 million adults in England and Wales had life problems that went unresolved last year because they did not get any help for debt problems.In a new report, the national problem-solving charity reported that consumer debt issues seen by CAB staff rose by 74 per cent from 405,800 in 1996/7 to 706,700 in 2003/4.

Last year they dealt with nearly 1.1 million debt-related issues, with consumer debt by far the most regular problem for which people come for help.The personal cost of such debt was highlighted this week when a committee of MPs heard how 21-year-old Scott Smith, a deaf man from Catfield, Norfolk, killed himself after running up five-figure debts on credit cards and personal loans. “Citizens Advice has been warning for a number of years that the problem of personal debt is reaching crisis levels and the fact that the number of consumer debt problems brought to us has risen significantly yet again underlines this warning,” said CAB chief executive David Harker.

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