Over 40% of people in debt risk their debt snowballing

New research by insolvency trade body R3 has revealed that over 40% – 44% to be precise – of individuals in debt and who freely admit to struggling with such debt have not sought financial advice from a financial expert as they do not believe that their problem is big enough to require such assistance.

R3 estimates that nearly 1 million people struggling with debt have not sought help, and the research found that close to ten percent (9%) of individuals were reluctant to seek advice because they were afraid of being made bankrupt.

The findings show that the stigma of admitting to debt problems remains as more than one in ten (14%) have not sought help because they are worried about what people would think, with eleven percent concerned about the effect it will have on their families.

R3 President, Steven Law commented:

“It is worrying that individuals are not seeking professional advice at the first signs of financial difficulty because they don’t think their problems are severe enough. While it may be the case that these problems are resolved without help, there is a risk that they might snowball out of control. Professional advice does not mean immediate bankruptcy. It could simply result in advice on budgeting.

“It would seem that many of the individuals who need financial advice are burying their head in the sand. Unfortunately, refusing to acknowledge your financial troubles won’t make them disappear. The sad thing is, the longer someone takes to get help the fewer options will be available to them. If individuals leave it too late to seek help, bankruptcy may be their only choice.

“If someone seeks help early they will be able to take stock of their finances and will be on their way to attaining peace of mind. They may also avoid going into a formal insolvency procedure.”