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Campaign highlights burden of family debt
HARD-UP South Yorkshire families with debts of up to £1 million have come forward seeking help following the launch of The Star's Debts Crisis campaign.
And a Sheffield nurse who had 31,000 of credit card debts is celebrating today after more than 8,000 was written off under one scheme available.
She qualified for an Individual Voluntary Arrangement, or IVA - that helps people owing more than 15,000. It can write off what people can't afford to pay, with monthly payments over five years.
The married 27-year-old, from Sheffield, said: "Now I don't have to worry about phone calls chasing me for payments. Our nightmare is over."
The Star has previously reported how a heartbroken Barnsley wife urged debt-hit families to seek advice after her husband hanged himself because he had mortgage arrears and faced eviction.
It all highlights the plight of desperate families as consumer debts spiral out of control, with up to 3,000 insolvencies feared in South Yorkshire this year.
However, people are warned not to rush into IVAs or other agreements without independent advice, because they are not suitable for everyone.
Support service The Insolvency Helpline said people must be able to commit to paying 200 a month for five years and cannot obtain further unsecured borrowing once an IVA has been set up.
An IVA is recorded on the Individual Insolvency Register, which is searchable by the public. And you cannot leave out some creditors from the agreement - otherwise they can continue to pursue your debt. Also, the insolvency practitioner may request some of the equity in your property is released as part of the deal with creditors.
If an IVA fails, the person will be made bankrupt. It is also legally binding and if you lie on an application, it is a criminal offence.
Other options for dealing with bankruptcy include remortgaging or a consolidation loan, a debt management plan, which can take 10 years to clear what you owe, or bankruptcy, which can carry a stigma and may affect job applications.
Tony Wilkinson, owner of Barnsley-based UK Consumer Debt Line in Dodworth, is supporting The Star campaign with free confidential personal financial help and advice.
He said: "Forty readers have come forward with a total of 1,078,700 in credit card and unsecured personal debts - an average of 26,967 each. Some people don't realise how much in debt they are. One told us they had 35,000 of debt but in fact it was just over 50,000.
"We know there are lots of other families out there who need help. Last year there were 870 insolvencies in Sheffield, 586 in Doncaster, 512 in Rotherham and 480 in Barnsley."
For free confidential help, email info@ukconsumerdebtline.com or visit thestar.co.uk/debt or call the UK Consumer Debt Line on 0845 6586606.
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Saturday 26 May 2012
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