Michael is backing a new Breathing Space scheme to help families struggling to deal with their debts, after figures showed a post-credit crunch high in household debt.
As reported by the Barnsley News & Sport on 23rd January 2017.
Michael is backing plans for a new scheme to help local families struggling to deal with their debts.
His intervention comes after new figures revealed there are an estimated 3,227 families in Barnsley East, including 5,629 children, living with problem debts, according to the Children’s Society and debt charity StepChange.
Michael is supporting a proposal by the two charities to introduce a statutory “Breathing Space” for families in debt.
Such a scheme – which is being considered by the Government – would build on protections offered under the Debt Arrangement Scheme in Scotland and would support families sticking to an affordable repayment plan so they are not hassled by aggressive creditors.
New Bank of England figures reveal that unsecured household debt has risen at its fastest rate since the financial crisis in 2008, and evidence from The Children’s Society shows the impact household debt can have on children’s mental health.
The two charities warned that aggressive action from lenders and pressure to repay debts at an unaffordable rate can lead families to cut back on essentials like food, take out other, expensive loans, or fall further behind on bills.
The proposed Breathing Space scheme would offer people seeking debt advice a 12-month legal protection from mounting interest, charges and enforcement action.
Michael said: “It’s terrible that children’s mental health is suffering because some lenders are unfairly pressurising people over their debts.
“Families with debt problems in Barnsley East need time and space to get back on their feet.
By giving them a period free from additional interest, charges and enforcement action, this new Breathing Space scheme would help families recover their financial situation and put in place an affordable plan to repay their debts.”
“The Government now needs to act by putting a comprehensive Breathing Space scheme in place.”