Poorest in society hounded by debt
Mr. and Mrs. Vulnerable are playing into the hands of unscrupulous debt collectors who will go to great lengths to retrieve money owed to them.
With high interest loans easily available to low income families, credit is handed out to desperate families who need money to clear existing debt or to simply stay afloat. Often these loans are followed by a debt collector who will make weekly visits to retrieve payments.
Unscrupulous lenders will prey on families receiving benefits as they know that these are the people most desperate for extra cash.
To start the debt rolling, lenders usually reel customers in by offering small loans of £100 to see if payments are made on time. Later, they increase the sums so as borrowers can slowly dig their way into financial ruin. Debt collectors see families claiming benefits as a reliable means of income as they are guaranteed weekly benefits which are paid into their accounts.
Many are left with the fear of finding the next payment, and dread the knock on the door from the debt collector and the threat of bankruptcy. One borrower claimed that she lay awake every night worrying where she would find the money. She became a prisoner in her own home and was scared to go out for fear of bumping into the collector. She was scared to walk around her home as he would often peer through her letterbox or living room to see if she was at home before knocking.
A better alternative would be to join a credit union where members contribute to a savings scheme for a set period. After this time they can borrow up to three times the amount that they have saved and expect a maximum of just 1% interest to be added per month.
If you are in debt, it's always best to seek debt advice before borrowing again.
Debt Advice News posted on 02/10/2007 16:02:32
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