ISLINGTON MIDDLE CLASS IN DEBT CRISIS

Published: 6th May, 2011
by PETER GRUNER

HUNDREDS of Islington professional people struggling to pay their large bills are turning up at Islington’s new Citizens Advice Bureau desperate for help, it emerged this week.

Home owners, who are unable to pay off large mortgages, and business people who can’t access loans, are in serious debt for the first time in their lives, according to the CAB.

Significantly, CAB advice workers point out that growing numbers of professional women in their 30s are seeking financial guidance to cope with crippling credit card bills in the tough economic climate. 

Many with unmanageable debts face losing homes even though banks and building societies say this is always the last resort. 

Private renting is extremely expensive and the scarcity of council ­housing means people can end up on the street.

For years, say the CAB, it was mainly the poorest and most vulnerable residents who sought help with debt. But today in Islington, one of the country’s most expensive boroughs to live in, it is also the middle classes who find that they are no longer successfully managing their money. 

Jeanette Daly Mathias, who manages the CAB in Upper Street, said. “We are a lifeline for those who are in serious trouble.

“But often we don’t just have to deal with a person’s financial affairs, we also have to deal with their state of mind. Depression is very common when you are in serious debt.” 

Ms Daly Mathias blames the availability of credit and social pressure to keep up with friends for tempting all sections to go society into debt. 

She said: “I’ve seen women who use dozens of different credit cards in order to obtain the nought per cent interest. In one case a woman found she owed £80,000. But I’ve also seen people with a small £4,000 or £5,000 debt in floods of tears in my office because they are scared.  

“One divorced single woman with two children was paying her electricity bill by credit card, which you must never do.”  

CAB workers advise clients to pay off emergency debts first, then investigate if they are entitled to any benefits or see if they can obtain funds owed, and then try and negotiate around other debts. CAB, which has been operating for a month at the former Green Centre, currently sees an average of 40 to 70 clients a day.  

Dilith Jones, a housing case worker, said people are taking on ever expensive mortgages. 

She added: “Many people prefer not to rent  because it is so expensive. But high mortgages can be equally expensive to pay off.

“One client bought a former council property under Right to Buy. He couldn’t afford the mortgage arrangements so it looks like he’ll have to sell up and buy somewhere in a cheaper area.  

“I’ve had clients who have lost their homes. I’ve had to warn them that they have virtually no chance of getting a council flat. That’s a terrible thing to tell someone who has nowhere to live.” 

Islington CAB is available 9.30am to 4.30pm every week day accept Thursday when it’s 1pm till 8pm.