There were 135,000 insolvencies in the UK last year, and for 2011 more redundancies are forecast, along with falling house values and the threat of higher interest rates.
Combined with tight lending criteria, conditions are ripe for a debt crisis and little is being done about it.
Government gave a 12-month reprieve to 500 free debt advisers it made redundant last week, but local authorities, the biggest supporters of free debt advice, must cut their budgets in this sector by 50% in April.
The Citizens Advice Bureau receives an average of 9,500 calls per day and is struggling to cope.
In the absence of a formal regulator to monitor the debt business, the Office of Fair Trading recently investigated UK debt management companies.
This resulted in 35 companies having their licences revoked while warnings and requests for further information were sent to 129 firms.
The OFT is tightening up on bad advisers. Applications for a Consumer Credit Licence are now subject to increased scrutiny.
So can mortgage professionals and IFAs assist this growing number of indebted individuals?
Yes – our industry is at hand to identify individuals who need advice.
Advisers can help by referring clients to reputable debt specialists and keep that customer for life. Alternatively they could become more qualified in the debt solutions market.
And there are reputable companies that can access every available solution to debt problems.