Due to the global credit crunch and recession, the nation’s finances have suffered from an average fall of almost ¬¨¬£31k per household, straining many people’s ability to ease their daily debt problems.

A dramatic drop in property prices and a similar fall in pensions and investments meant that for many people the chance to release equity from their property and relieve debt management issues is no longer an option.

The report highlighted that the overall accumulated wealth of UK homes, plummeted by ¬£815bn during the course of last year Рa drop of 12%.

Martin Ellis, chief economist at the Halifax said: “It is a huge drop to happen in one year. But we have had the biggest house price fall yet seen in just one year, combined with a fall in equity prices.”

Debt advice organisations have spoken of the increased number of people seeking their help, to cope with the reduced options available.

Ivan Cooper, Chairman at leading debt management company Chiltern, said: “For those who have relied on re-mortgaging to get out of debt in the past, they will have to look at other ways to cope with their finances.

“As house prices have fallen so far, the ability to release equity for many people is no longer an option – as there just isn’t any there in some cases.

“A good start is to seek impartial debt advice from a trusted and impartial organisation. These will be able to offer immediate help and support, along with being able to recommend a professional debt solution if one is needed.”

Reputable organisations, such as The Debt People, Chiltern and Hamilton Locke, can provide free debt advice to people suffering with debt problems.

Where necessary they can also provide a number of professional solutions, like Debt Management Plans (DMPs) and Individual Voluntary Arrangements (IVAs), to help you get out of debt.

Debt management issues rise as we all lose £31k is a post from: TheDebtPeople.co.uk

According to figures released by Ernst and Young, the economy will shrink by 4.5% during 2009, the largest fall in more than 60 years. Their forecast is worse than the official government prediction of 3.5%.

The last few months have seen a lot of changes. For many years the country was enjoying a boom, with house prices increasing every month and credit had never been easier to come by. These situations lead to a lot of consumers getting into financial difficulty, by borrowing more than they could reasonably afford.

Now that the credit crunch, and resultant recession, has turned everything upside down a lot of financial casualties have been left in its wake. The main problems are related to excessive mortgages, as well as high interest loans and too much credit card debt.

Many economists are making gloomy predictions for the future, and believe that the worst may not be behind us yet. Some analysts are of the opinion that the UK could experience a “double dip” recession, where we see the economy improve and stabilise, before shrinking again.

The banks were blamed for much of the current stagnation; as they were accused of not lending enough money to stimulate the economy back into growth. There was also a warning concerning the economic threat of swine flu. The worst case scenario is an extra contraction in the economy of 3% this year, attributed to the illness, followed by a shrinking of 1.2% next year.

The only hope for a quick recovery could be an expansion in world trade that could be exploited by UK exporters whilst the pound is weak.

Debt advice required as economy shrinks is a post from: TheDebtPeople.co.uk

They also found that spending on clothes, gym memberships and holidays has recovered over the past six months and is now higher than before the credit crunch.

Ivan Cooper, Chairman of leading debt management organisation Chiltern, said: “If people are having to borrow money simply to maintain a frivolous lifestyle that otherwise they couldn’t afford, then they are clearly living beyond their means.

“Anyone who spends in this way could benefit from debt management help, to avoid the threat of bankruptcy that overstretched finances brings.”

Women’s spending hides future debt management issues is a post from: TheDebtPeople.co.uk