Millions of people are struggling to manage their debts as the recent interest rate rises and the high cost of living take their toll. Experts predict that the worst is not yet over as the global credit crisis pushes up mortgage rates with the number of people who need help to cope with mounting debts soaring to record levels. Mortgages, council tax and utilities are all more expensive with the high cost of oil causing misery for millions of households pushing up their utility bills around 50% last year. The Bank of England has raised interest rates five times over the past year to the current rate of 5.75% and these increases are now beginning to take their toll on homeowners. The number of homes repossessed by lenders has soared by 30% over the past year to 14,000 in the first half of 2007 according to the latest figures from the Council of Mortgage lenders. High house prices have stretched many borrowers to their limit just to get onto the housing ladder and any increases h ave a significant effect on their finances together with debts mounting up because of summer holidays, the new uniforms needed for school and Christmas just around the corner.

It has been suggested that banks are partly to blame for the debt casualties, being too quick to lend money to people who cannot afford to take on more debt. However, lenders deny the claims stating that debt problems often arise after sudden unexpected events such as illness or unemployment which cannot be predicted.

The UK is now at the top of the debt league, owing a total of £1.3 trillion, more than any other country in Western Europe.

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Article referenced from http://www.sundayherald.com