Families feel the pinch

May 21 2008 by Adrian Pearson, The Journal

A SHARP rise in the number of debt-ridden households facing court action has been blamed on the worsening credit crunch.

County court judgments (CCJs) issued in Gateshead and North Shields have risen by more than 60% in just three months as increases in mortgage repayments and rising fuel prices force many to default on repayments.

Gateshead courts, which had issued 818 judgments in the last three months of 2007, have so far handed out 1,391 CCJs this year.

In North Shields, the courts saw a 61% increase in the number of CCJs issued, from 229 at the end of 2007 up to 368 in the first three months of 2008, while in South Shields the numbers increased by 45%. Credit agency Callcredit said the increases were proof that North households were feeling the impact of the worsening economic climate.

Owen Roberts, head of Callcredit Check, said North families should be prepared for difficult times ahead.

He said: “The rising cost of living and increases in mortgage rates appear to be hitting residents in Gateshead hard, and are no doubt a contributory factor to the rise in CCJs being issued.

“With a gloomy outlook being painted by many financial experts, we’d advise consumers to check their credit report as a first step towards gaining a full understanding of their financial situation.

“If circumstances are becoming unmanageable, borrowers should contact their lender or an organisation such as the consumer credit counselling service to obtain independent advice on the best way forward.”

But last night Tynemouth MP Alan Campbell said the situation in the North was not as dire as some financial groups are claiming.

He said: “Whatever the short-term problems and difficulties for individuals affected, we shouldn’t lose sight of the underlying strength of the economy with high levels of employment, not least here in the North East.”