May 06 2010: Avoiding the debt trap with Moorhead Savage
LATEST statistics suggest that more than half of Sheffield families are now in debt, with 17 per cent of people lying to their partners about the amount of money they owe.
But South Yorkshire debt expert Paul Moorhead says there are ways to work through the crisis without resorting to even more borrowing.
“The figures suggest that something like 53 per cent of people are in the red and that the average figure for debt is £11,664.07,” said Paul, the managing director of South Yorkshire insolvency practice Moorhead Savage and the only insolvency practitioner in the UK with a PhD in insolvency law.
“We are certainly seeing more and more people coming to us looking for help and advice with their debt problem so these figures are no surprise at all.
“The key problem is that people have got used to having levels of unsecured debt that their parents and grandparents would never have dreamt about because it simply wasn’t available.”
But with the recession still not over, those levels of debt, Paul points out, often prove unsustainable.
“People are losing overtime, facing pay freezes and even losing their jobs and it can take only a relatively small financial shock to tip people over the edge and into serious debt.
“Debt per se is not the problem but unaffordable debt is – and that’s the crisis many people are facing now.”
The answer, Paul says, is to understand fully the level of the debt problem and then to work out a complete household budget, calculating how much money is coming in and how much needs to go out.
“Work out exactly how much you are spending every month and then see if you can make any savings in expenditure so if you do have to negotiate with creditors you will at least be able to make them a realistic offer for repayment,” he says.
At the same time, though, Paul warns that attitudes to credit are going to have to change.
“People are going to have to wean themselves off this national obsession with debt,” he insists. “As a society we need to get to a situation where people see success as being debt-free rather than measuring success by the ability to go out and obtain a big mortgage or a car on hire purchase.”
To talk to Paul Moorhead about debt problems call 01709 331300.
