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In The Spotlight
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Over a third of debtors blame relationship breakdown on their money troubles
Monday 26th July 2010By Stephanie Baxter
The human cost of debt can be just as shattering as the economic consequences, according to a recent survey by a leading debt charity.
Money worries can seriously damage a debtor’s relationships, health and job performance, reveals groundbreaking research by the Consumer Credit Counselling Service (CCCS).
More than eight out of ten people admitted that being in debt has had a devastating effect on their lives while almost half (46 per cent) said that it had affected their health.
Delroy Corinaldi, external affairs director at CCCS, said: “There is a lot of focus on the economic implications of the personal debt crisis but we are only starting to understand the human cost of debt problems.”
Of the 372 respondents, 65 per cent revealed that debt had compromised their ability to do their job, while 37 per cent said that it had put a strain on their relationship with their partner.
The results also showed that 22 per cent of the 372 respondents had experienced debt having a negative effect on their relationship with their children.
Mr Corinaldi said that while he wasn’t surprised that debt has a negative effect on people’s lives, he was shocked and saddened at the extent of human misery uncovered in the survey.
While most people said that the stress of debt had induced heart palpitations, hair loss and nervous breakdowns, only 6 per cent of people said that debt had no impact at all on their health.
Brian Bird, a debt advisor and franchisee for debt solutions firm EuroDebt, has seen families crumble under the weight of debt during his six years in the sector.
He told Debt Management Today: “I’ve seen many cases where debt talk has sparked heated and teary arguments: this kind of thing is so common.
“Even the most minute debt problems drive a wedge between couples. It’s a destroyer of families; it’s frightening to watch.
The impact on relationships might hold the answer as to why so many debtors keep their money problems hidden from their close ones. Only 34 per cent of respondents confided in their partner while 20 per cent told friends. A small 16 per cent revealed their debt secrets to their parents and ten per cent didn’t tell anyone because they were too ashamed or embarrassed to admit they couldn’t manage their finances.
In one of Brian’s cases, an elderly lady hid her debt dilemma from her husband. Worryingly, both their names were on the credit agreements, which caused drama when the husband entered the house unexpectedly.
“She felt put on the spot but I told her ‘you have to tell him, you can’t hide this anymore.’ So they went away to talk and she came back crying her eyes out, but they were holding hands and he said to her ‘we’ll get through this.’ She said she felt relieved, like a weight had been lifted from her.”
Backing up previous research from other debt solutions providers, it was found that loss of income was the top reason for people falling into a debt spiral, with nearly 50 per cent in debt due to redundancy, a pay freeze or reduced working hours, while only 15 per cent had been overspending.
Relationship breakdown, illness and having children drove the remaining 35 per cent into insolvency.
Delroy Corinaldi commented: “This busts the myth that recklessness with credit is the main cause of debt problems. Rather, it is life itself over which we often have no control.
“Such people need sympathetic and practical support to guide them through this crisis so that it won’t scar them and their families for life.”
With public sector cuts and the new budget on their way, the next few years could see an increase in people struggling with debt because of redundancy or pay freezes, said Brian Bird.
“Redundancy is one of the main factors behind personal debt but we haven’t seen the tip of the iceberg yet,” he remarked.
“I see a lot of career people with big incomes get into debt because they’ve been made redundant and have few savings because they’ve relied on their incomes to fund their lifestyles.
“It just goes to show that debt knows no barriers.”
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