Women increasingly at risk of debt problems

Statistics published by the debt management industry demonstrates just how gravely women are struggling with debt. Unemployment is a major factor in the problem and is causing a large number of individuals to seek debt solutions such as a DMP for assistance.

Even some households where there are two parents in work are finding it impossible to make ends meet. The survey's respondents admitted that in almost 70% of cases, they are less well off than last year, and did not have sufficient finances to manage on a week by week basis. This alludes to the fact that the need for debt management like a DMP will increase as individuals try to find a method of bringing their costs in line with their income.

Also brought to light in the survey was the fact that a fifth of the mums who repsonded are frequently not eating meals so their children can eat. Debt management plan advisers often talk to people who have made severe cutbacks in a last ditch attempt to keep up with debt repayments as well as their other expenses.

Debt management plan numbers are also likely to be driven upwards if the responses to the survey are reflected in the wider community, as almost a 25% of the survey's respondents have become reliant on sources of everyday credit to pay for everyday items. Another bad omen which points to the fact that the requirement for DMPs will increase more widely is the boost in those who are dependent on short term sources of credit to make ends meet, with nearly 25% admitting to using credit cards to cover everyday expenses. This is indicatory of a negative debt spiral, where so much income is being consumed by debt repayments that there is not enough disposable income remains to cover essential items. A DMP is one option available to those struggling with their debts to address and resolve this type of debt spiral.

One element of the survey that was of a lot of concern to debt management plan advisers was the fact that one in every 20 of those individuals of those surveyed admitted to having used a payday loan service one or more times. Debt management plan firms have become highly critical of payday loan companies as a result of the quantity of DMP customers who have been left in a real financial mess because of excessively expensive credit options.

The situation for women, and especially for amongst individuals who have dependents, seems likely to become even worse the near future. It is thought that around three quarters of a million public sector workers will be made redundant over the coming 5 years and up to 80% of the current public sector workforce is female. Fewer jobs amongst women will sadly cause debt problems creating more demand for the assistance of a debt management plan professional.

It's a real cause for concern that certain demographics stand to be particularly affected by the macroeconomic climate around the United Kingdom and by public sector cuts in particular. There are those that will inevitably turn to sources of credit to keep up with their unavoidable expenses until there comes a point when they can return to work. Individuals who already have credit commitments may discover that insolvency solutions or a debt management plan may be the only measure to deal with their debts, even when they have resumed a normal working life.

Payday loans increase debt management plan numbers

The rising cost of housing has forced at least 1 million UK citizens to try a payday loan. The penalty clauses and terrifyingly high interest rates of payday loans can create terrible debt problems. A debt management plan is all-too-often sought to help such debtors work their way out of debt.

Debt management plan experts speak of debts falling into 2 types. The 1st kind is a "priority debt". They are described as priorities because, if left unpaid, you might lose access to essential items and services like electricity, mortgages and gas. Any debts which concern payday loans, credit cards, bank loans and overdrafts are seen as less crucial than priority debts and are consequently known as "non-priority" debts.

As many payday loans are payable at a concrete time and involve significant sums, they are highly stressful. This unfortunate mixture makes payday loans an extremely high-pressure variety of debt. Debtors are likely to repay their payday loan at the expense of their priority loans due to this pressure - landing them in lots of trouble.

So what's next? Debtors are naturally concerned about the outcomes of not paying their mortgage or rent, so they'll often source yet another payday loan to be used for the payment. It is common to see payday loans with 3000% APR interest rates which makes the problem even worse. Unfortunately this is a situation debt management plan advisers see all the time. Every unmanageable debt requires another unsecured loan to pay it off which, in turn, requires another payday loan to handle.

Mortgages, gas and electricity are not the sole reason people get a payday loan and then find themselves needing the debt management plan. One popular consumer journalist recently detailed his own experience of taking out a small payday loan as an experiment.

The journalist found that, once he repaid the loan, he was inundated by payday loan advertising. The payday loan advertising teams hounded him relentlessly, offering him loans by post, email, phone and text. He was offered a promotional loan for his birthday ("... enjoy your birthday worry-free"). He was also offered incentives to sign up his friends for payday loans.

In a tough financial time, where rising numbers of people are struggling to pay priority debts or resorting to a debt management plan when circumstances become too tough, this level of marketing by payday loan companies will obviously create financial problems and debt distress for many years to come.

Payday loans should categorically not be used if you are currently struggling with debt. Extra lending with a massive APR can only make things worse as the fact that you require it in the first place almost inevitably means you are going to struggle to repay it. If you are in a situation where you have debts and are finding thing hard financially, the first thing to do is to break the debt cycle. Starting the debt management plan is one way to implement this break, but there are many other ways which can help depending on your circumstances.