Debt, Business Debt and Specialist Support Services 2021

Since January 2021, our debt service has advised 3,809 clients and dealt with over £19 million in debt.

Reflecting on 2021

Since January 2021, our debt service has advised 3,809 clients and dealt with over £19 million in debt. We provide free, confidential advice on personal debt and business debt, via our Freephone helpline number, email and web chat. Our Member organisations provide face to face debt services in every council area across Northern Ireland.

We also have a range of self-help resources, including factsheets and money management tools.

Our advisers have continued to advise and support clients via telephony and digital channels against the background of Covid-19. Mid way through the year, in line with government guidelines and stringent health and safety measures for staff and clients, our members reintroduced face to face advice services.

Many clients continue to struggle against increasing financial pressure, with low income and over commitment being the main causes of problem debt for our clients. Many clients who approach our service for help have no savings or life insurance in place. Our advisers have experienced an increase in clients dealing with addiction and gambling problems, which greatly increase financial pressure on clients.

Covid-19 has increased the difficulty for clients to deal with their debts. Insolvency solutions such as bankruptcy have not been as readily available due to court proceedings being suspended. Reductions in income together with significant cost of living rises and increased household expenses, have made it difficult for clients to plan and maintain debt repayment plans.

Our Business Debt Service has consistently been presented with clients concerned about financial instability. Sole Traders and Limited Companies have found it difficult to assess how their businesses will be impacted in the future, and whether they can continue to trade, with many reporting an increased reliance on family and friends.

Looking ahead into 2022

Following a lengthy period of forbearance due to Covid, lenders are now beginning to take recovery action, and we expect this to increase significantly as we head into the New Year.

We expect Repossession hearings to increase, as petitions are now beginning to go in front of the Masters, and the Land and Property Service are due to commence recovery action on domestic and business rates arrears. We anticipate an increase in credit card debt that clients typically experience in January following the Christmas period. And with additional utility hikes expected in the early New Year, we envisage an increase in clients struggling with electricity and gas bills. The continued cost of living, the forthcoming hike in National Insurance payments in April 2022, and potential interest rate increases, will all further exacerbate financial hardship experienced by our clients.

Many Business Debt clients will have to deal with impending bounce back loan repayments, which they will struggle to maintain when their current income remains below pre Covid levels.

We welcome the expected legislative review of the Debt Relief Order criteria scheduled to happen in the latter part of 2022. This would see the debt threshold increase to £30,000, in line with current legislation in England and Wales, enabling clients whose total debt is below this threshold to consider a DRO as an insolvency option.

The no interest loan scheme (NILS) is a two year pilot to be rolled out in up to six areas of higher deprivation starting in Autumn 2022. The loans will provide a vital financial cushion for people unable to access or afford existing forms of credit, but who can afford to repay small sums, by offering a way to spread essential or emergency costs.

The Department for Communities has commissioned MindWise to conduct research about the need for a Breathing Space debt solution for people in mental health crisis, and this research will help to inform decisions about the introduction of Breathing Space legislation in Northern Ireland. We will be involved in this process to inform how clients are impacted by problem debt. 

Our advisers welcome the New Year and the opportunity to provide much needed support and advice to clients struggling with money and debt issues. We know many are fearful and anxious about what the future holds, whilst still trying to deal with the impact that Covid has had on them financially, emotionally and physically.

Emma Mullin

Advice NI’s Service Manager (Debt)

Freephone advice helpline: 0800 915 4604

Email: advice@adviceni.net

https://www.adviceni.net/money-debt/debt/local-debt-advice