Emma Reynolds, Labour MP for Wolverhampton North East, has backed calls for a new scheme to help thousands of families regain control of their finances.  Data from the Bank of England shows unsecured household debt rising at its fastest rate since the financial crisis in 2008.

The rise in personal borrowing has led to mounting concern that households who get into debt need safer ways to manage financial difficulties.

In Wolverhampton North East alone, families with an estimated 4200 children are living with problem debt. Analysis from The Children’s Society shows that children in low-income families with multiple debts are more likely to suffer from mental health problems than equivalent families with fewer debts.

Emma is backing calls to introduce a ‘Breathing Space’ scheme – supported by The Children’s Society and StepChange Debt Charity. This would offer people seeking debt advice a 12-month legal protection from mounting interest charges and enforcement action. It would be modelled on protections offered under the Debt Arrangement Scheme in Scotland, which has made sure that families sticking to an affordable repayment plan, agreed with their creditors, are not harried or hassled for the duration of that plan.

Emma said: “Families with problem debts need time and space to get back on their feet. A new ‘Breathing Space’ period free from additional interest, would help families to recover their financial situation and put in place a plan to affordably repay their debts.

“Debt often strikes when people experience sudden changes in circumstances such as job loss or ill health. Aggressive action from creditors and pressure to repay debts at an unaffordable rate can lead families to cut back on everyday essentials like food, and take out other expensive loans or fall further behind on essential bills. This can have a damaging impact on children. More needs to be done to offer those families the support they need.

“The Government needs to act to put a comprehensive Breathing Space scheme in place.”

Have you experienced debt problems? I want to hear from you. Please click on the link to fill in my survey: https://docs.google.com/forms/d/e/1FAIpQLScpDZ_lch-mYzRxUL25M23t5KjmOSmZc2plTNiXeb6LmQOIPA/viewform

February 2017