UK Debt Charity StepChange have released figures for the first half of 2016 showing that 28% of their clients have debts owing to friends and family.
The average debt owing to friends and/or family is now an average of £4.046. This figure is nearly 25% up on the figure from two years ago and is causing concern.
The charity has warned the public that owing debt can damage relationships. A third of the people quizzed as part of their research said it had a negative effect on their relationships with spouses and partners.
16% of those quizzed advised that it had also affected their friendships with 3% saying they were no longer friends.
StepChange advised that borrowing from loved ones will probably not have a positive effect on the underlying problem and will only strain relationships and make the matter worse.
The Chief Executive of StepChange Mike O’Connor commented “It is good that people support their friends and family but lending them money can bring serious and unexpected problems”
“If repayments to a family member or friend are then missed, or more money is needed to make ends meet, debt can cause serious damage to their relationships as well”
Private Debt Collection Experts Frontline Collections also advised they have seen an increase in unpaid personal Debts. They issued a article on their website on the best practice for advice on collecting a debt from a friend or relative
Lending money to a close associate can often exacerbate the problem and may only provide a temporary relief from the real issues causing their financial turmoil.
For individuals in financial trouble, StepChange are a great first port of call for advice and assistance.
If you are an individual owed money from a friend or relative, there are professional Debt Collection Agencies who should be able to assist providing their is adequate and documented evidence of the debt.