Rise in insolvency cases in Shropshire is 'cause for concern'

Earlier this week it emerged that deteriorating finances forced hundreds of residents across Shropshire, Telford & Wrekin and Mid Wales into insolvency last year.

Insolvency Service figures show that 560 people in Shropshire were unable to pay their debts in 2018, and were forced to enter into repayment plans with creditors.

There were 492 people in the same situation in Telford and Wrekin and 221 in Powys.

Just Credit Union, the county's not-for-profit community bank, says a large proportion of adults have no savings at all so when they hit a bump in the road the situation can spiral out of control.

"That bump may be a sudden reduction in income, or an unexpected bill resulting from a failed MOT, a heating repair or a broken washing machine,” said Steve Barras, Just Credit Union’s business development and marketing officer.

“A poor decision to resolve the situation can result in a spiral of unaffordable expensive debt which eventually becomes unmanageable."

Just Credit Union is Shropshire’s ethical savings and loans company which encourages saving and provides affordable loans to people who live or work in the county.

Spiral

Steve said: “We don’t have the big advertising budgets many less ethical providers have and 60 per cent of our members come from personal referral.

“We see many people who have spiralled into unmanageable debt and sometimes they come to us when it is too late.

"Whilst we try to help everyone, for some it is frustratingly late, and we would encourage people to consider using the credit union sooner rather than later as this can help avoid the spiral completely.”

Credit unions are member owned not-for-profit co-operatives and the money saved with them is the money that is loaned to the local community.

Savings are protected in the same way as bank savings.

Steve said credit unions were often overlooked when people have a sudden need for a loan, but nine out of 10 of Shropshire’s Just Credit Union members would recommend membership to family and friends.

Mark Perez, chairman of JCU, said: "People who try Just Credit Union’s services very quickly become advocates and encourage family and friends to join.

“Credit Unions have a unique save as you borrow model, every member with a loan also has a savings account so that they build up a safety buffer and get the savings habit."

Steve added: “The majority of credit union members go on to be savers.

"We have a long term positive impact on our members.

"70 per cent of members in a recent survey said their financial knowledge and security had improved or significantly improve."

Anyone who would like to support Just Credit Union and the local economy by saving with them, or is in need of an ethical affordable loan, can find out more at justcreditunion.org or call 01743 252325.