Debt advice charities are looking into the possibilities of running a pilot scheme that would result in some debtors dealing with their own problems. The scheme would be reserved for the more financially aware, and it would save time for the overworked advisers, who would no longer have to spend hours filling in paperwork with the debtor. Effectively, these debtors would be asked to sort out their own debt problems, on a self-help basis, in a bid to free up time for the advisers.
Once the debtor has completed the paperwork, it would then be checked by an adviser from organisations such as National Debtline, or the Citizens Advice Bureau. Once the advisers have analysed the finances of the debtor, the most appropriate debt solution would be recommended, such as an IVA (Individual Voluntary Arrangement) or Debt Management.
It is believed that the self-help scheme could reduce the average time an adviser is required to spend with a debtor by as much as four hours, from five hours to just one. The charities are taking this step because of the massive increase in the number of consumers that are falling into financial difficulty and in need of help, and they estimate that as many as 2 million people, that require debt advice, will be unable to make an appointment with a debt advice charity.
According to National Debtline, they are only able to take enquiries from around 800 people, on a daily basis, however twice that number are attempting to get through to them for help. They have tried to employ more people, to help with the volume of cases, but they still expect to be short staffed, and unable to cope.
According to the CAB, there has been a 70% jump in the number of consumers with mortgage problems, since last year. There has also been an increase in the number of middle-class people seeking IVA advice, as the recession drags on. The biggest contributors to the financial difficulty of the more affluent, being personal loans and excessive credit card debt.