Britain's debtors welcome emergency relief over redundancy and hardship suffering

A new scheme launched by the government is to allow redundant and displaced workers a six-month debt relief programme for professionals who find themselves suddenly unemployed or the victim of tragic personal circumstances.

Under fresh Whitepaper plans aimed at the nations' debtors, people who have lost their job, suffered illness or relationship breakdown would get up to six months from the payment date of a court order.

The Department for Constitutional Affairs has also outlined 'No Income No Asset' (NINA) schemes, for parties unable to payout directly or return debt sums over time.

David Lammy, Minister at the DCA, said: "These proposals represent a measured approach to a problem that can have devastating effects on individuals, families and society."

"They feed into a strategy we are developing to cope with the high levels of indebtedness in society. It can become unmanageable, create other problems and then drags people into social exclusion."

In 2002, some 836,000 debt claims were issued in county courts representing a 52 per cent of the courts' caseload.

Redundant workers with debts totaling no more than £5,000 will be eligible for the Administration Order Scheme (AOS) - where multiple debts are managed from the court.

Likewise, a model that could discharge debt below £15,000 is reserved for those who through circumstances have no prospects of earning income.

The action plan will also set up the National debt helpline for those seeking money advice and debt management and is part of ongoing bid for greater financial transparency.

Next week the Bank of England is expected to confirm that total outstanding household debt including mortgages has reached £1,000bn.

The move comes as the Bank's Monetary Policy Committee voted earlier this month against a third successive rate rise to keep interest rates at 4.5 per cent.

According to recently published minutes, the Bank's nine-member MPC concluded after two days of meeting that there was, "no argument for a third successive rate rise" in July.

 

22nd July 2004

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