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20 February 2014

Debt crisis calls soar

Debt crisis calls soar

The number of people calling for help with crisis personal debt so far in 2014 has broken all records, says Alliance member and debt counselling charity Christians Against Poverty (CAP).

CAP's helpline – run by 239 local debt centre staff around the UK, who organise home visits to new clients – has seen a sharp and dramatic increase in the number of enquiries recently.

This comes as 27 bishops and other church leaders have written to the Mirror criticising the government's benefit changes and called on them to do more to address food shortages many families are experiencing. The letter says: "We must, as a society, face up to the fact that over half of people using foodbanks have been put in that situation by cut backs to and failures in the benefit system, whether it be payment delays or punitive sanctions."

The Archbishop of Westminster Vincent Nichols also criticised the UK's welfare system last weekend, calling it "seriously wrong" because it allows poorer members of society to remain in a destitute situation. He attacked government welfare reforms, saying they focus on saving money and take away the safety net against hunger and destitution and that it is a disgrace so many in this affluent country are reliant on food banks to make ends meet.

As part of an interview with the Telegraph, he said: "People do understand that we do need to tighten our belts and be much more responsible and careful in public expenditure.

"But the basic safety net that was there to guarantee that people would not be left in hunger or in destitution has actually been torn apart. It no longer exists and that is a real, real dramatic crisis."

Prime Minister David Cameron responded that these reforms are not just about what the country can afford but about what is right. He said the aim was to build a country where people aren't trapped in a cycle of dependency and a welfare system based on the principle of responsibility, as was initially intended when government welfare was first introduced. Mr Cameron believes the safety net continues to be there for those that need it.

Monday, 10 February, saw CAP's busiest day in its 18-year history of debt counselling with155 calls in a single day compared with 80 to 100 on a typical day during the previous year.

"We have never seen it like this," said Helen Webb, CAP's helpline team leader in Bradford, "and the worrying thing is, we can't see any one reason for the high level of calls. People needing our help are coming to us for the same variety of reasons they would normally. If there is one factor that unites them, it is that sadly there is a new level of desperation about those who are calling us."

One man, who had jumped from a bridge in London the previous week, was rescued and helped by a Trussell Trust foodbank and referred to CAP for help with debt. Another new client included a young man whose girlfriend and their baby who had no food in their cupboards and were unable to heat their rented flat. Another lady with Crohn's Disease was in chronic pain, taking morphine daily and was in arrears with all her household bills.

"You have to be quite emotionally robust to work on this team because you hear that real desperation in people's voices," continued Helen.

"They are feeling at their lowest, they've often really braved it to ask for help, but it's a special conversation to have with someone when you're able to tell them that it will get  better."

Every client is seen in their own home by their local CAP centre manager who learns as much as they can about the situation during a visit that lasts up to two hours.

All creditors' demands and unanswered bills are taken away and sent to the charity's head office in Bradford, West Yorkshire, where the size of the debt and the client's income is calculated.

CAP staff then begin negotiations with each creditor and help the client set a budget and payback process or talk through insolvency options if that applies.

Read more: The Debt Default by Dr Dave Landrum in the January/February 2014 issue of idea magazine