• Plans will help less than 1% of people with debt problems
• Opportunity for real debt solution has been lost
• Solution ignores real issue of long term debt

The Debt Resolution Forum (DRF), the training and accreditation body for the personal debt resolution industry, today, Monday 15 March 2010, criticised the government’s announcement of plans to help people with debt problems as a pre-election puff that would do little to alleviate Britain’s profound personal debt crisis.

The plans, put together by the British Bankers’ Association (BBA), the Consumer Credit Counselling Service (CCCS) and Citizens Advice (CitA), will give people who can’t pay a short-term window during which they need only repay the absolute minimum they can afford. For people who can only afford token repayments, the banks will agree not to add interest or charges during the period.

Commenting, DRF chairman and CEO of ClearDebt, David Mond, said:

“This arrangement will help few and may hinder many. The fact is that most struggling debtors don’t have short term debt problems – they’ve been failing to cope for years and a six month window will do nothing to help.

“DRF believes this has only been announced because of the government’s failure to agree a response to the recent consultation on regulated debt management plans (RDMPs). This had a good prospect of creating a new tool that would provide real long-term relief for people with debt issues, but who could afford to repay all they owed, over time. Together with the existing Individual Voluntary Arrangement (IVA), which helps people who cannot afford to repay all they owe, even over time, this would have created a debt-help culture suitable for most, fair to debtors and which ensured lenders got acceptable returns too.

“The 5,000 debtors a month CCCS hopes this will help, represents between a quarter and an eighth of one per cent of the calls for help on debt that the charitable sector estimate they receive (and 50% of which they do not have the capacity to help) every year. This announcement does nothing – and leaves Britain’s personal debt mountain as yet another problem that a new government will have to address after the general election”.

-Ends-

For further Information contact Andrew Smith
Tel: 0161 968 6825 / 07912 407 532
Email: andrew.smith@debtresolutionforum.org.uk

Twitter @Andrew_F_Smith

Website www.debtresolutionforum.org.uk
Twitter @DRF_UK

Note For Editors:
The Debt Resolution Forum was created by a group of organisations working within the debt sector who have campaigned from an industry wide level of service, ethics and standards. Members of the DRF are held to maintain the standards expected by this body. DRF is also the creator of the Certificate in Debt Resolution (Cert.DR), the first professional qualification for debt industry, accredited by Edexcel and welcomed by organisations such as the Ministry of Justice, Office of Fair Trading, Insolvency Practitioners Association and the Insolvency Service.

DRF has 41 members, representing more than half the IVAs and DMPs written in Britain today.