The risk of borrowing on top of borrowing
Families who try and borrow their way out of trouble are at risk of receiving a statutory demand and, ultimately, bankruptcy.
According to research by charity Shelter, an increasing number of households are turning to payday loans to cover their rent or mortgage repayments.
However given the exorbitant charges associated with this type of loan, struggling households are likely to be placing further pressure on their finances. Solicitor Andrew Watson is helping clients with statutory demands. He is not surprised by the findings:
“It is a sign of the times that so many households have to borrow - be it on credit cards, bank loans and short term loans - in order to sustain their general cost of living. But while this might keep the wolf from the door in the short term they will inevitably come back even hungrier.
“Pride understandably plays a huge part; Shelter’s found that two fifths of those surveyed would not admit money problems to friends or family. Whilst this may not be something people wish to share amongst loved ones, it is important to know you don’t have to go through it alone.
“We have been working with people who have received a statutory demand, helping them to either set the debt aside or negotiate a reduction.”
Content correct at time of publication