Friday 16th November, 2007 

Many people who use debt consolidation as a way of dealing with their debt problem will find it more difficult to pursue this strategy as cheap credit becomes less available, states director of debt charity.

Chris Tapp, director of Credit Action, claimed that as a result of the global credit crunch many people will be unable to sustain their current lifestyle and spending using debt consolidation. He explained that as a consequence of the rising cost of loans many people will be forced into looking at different options to deal with their debt problems. For many the only solution to their financial problems will be through a debt management plan.

Debtwatchdog urges those who are using debt consolidation as a way of dealing with their debt to reconsider their debt management strategy. Although debt consolidation can be useful it is strategy which is reliant upon the availability of cheaper credit. If this dries up then the only option for many will be a debt management plan or bankruptcy.

The advice from the debt Credit Action is that those who are finding it difficult to live within their means should "tighten their belts accordingly". Debtwatchdog backs up this advice and adds that those looking for help with adjusting their budget to suit their income should make use of the free Statement of Affairs calculator. Alternatively our debt forum is very helpful and friendly for those who are looking for additional help with their budgeting.